M/s. Medicaps Ltd.,, Indore v. The D.C.I.T., Indore

ITA 215/IND/2010 | 1994-1995
Pronouncement Date: 02-03-2011 | Result: Allowed

Appeal Details

RSA Number 21522714 RSA 2010
Assessee PAN AABCM1905G
Bench Indore
Appeal Number ITA 215/IND/2010
Duration Of Justice 10 month(s) 13 day(s)
Appellant M/s. Medicaps Ltd.,, Indore
Respondent The D.C.I.T., Indore
Appeal Type Income Tax Appeal
Pronouncement Date 02-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 02-03-2011
Date Of Final Hearing 22-12-2010
Next Hearing Date 22-12-2010
Assessment Year 1994-1995
Appeal Filed On 19-04-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NOS. 215 TO 220/IND/2010 A.YS.1994-95 1995-96 2003-04 2004-05 2006-07 & 2007-08 M/S MEDICAPS LIMITED INDORE PN AABCM 1905G APPELLANT VS DY. COMMISSIONER OF INCOME TAX 1(1) INDORE RESPONDENT APPELLANT BY : SHRI C.P. RAWKA RESPONDENT BY : SHRI P.K. MITRA O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THESE ARE THE APPEALS BY THE ASSESSEE AGAINST THE O RDERS OF THE LEARNED CIT(A) DATED 2.2.2010 AND 29.1.2010. DURIN G HEARING OF THESE APPEALS WE HAVE HEARD SHRI C.P. RAWKA LD. COUNSEL FOR THE ASSESSEE 2 AND SHRI PRADEEP KUMAR MITRA LEARNED SENIOR DEPART MENTAL REPRESENTATIVE. 2. IN ITA NOS. 215 AND 216/IND/2010 THE ASSESSEE HA S RAISED THE FOLLOWING COMMON GROUND :- THAT THE LEARNED CIT(A) ERRED IN LAW AND FACTS OF THE CASE AND CONFIRMED THE DISALLOWANCE MADE BY A.O. ON ACCOUNT OF ASSESEES CLAIM FOR INCLUSION OF DISCOUN T INCOME ON PURCHASE FOR COMPUTING THE DEDUCTION U/S 80HH AND 80I AT RS.303740/- (A.Y. 1994-95) AND RS.441010/- (A.Y.1995-96) WITHOUT CONSIDERING FULL FACTS. 3. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE PURCHASED RAW MATERIAL FROM SHAW WALLACE L IMITED WHICH GAVE TRADE DISCOUNT ON PURCHASE OF SUCH RAW MATERIA L THEREFORE IT IS HAVING A DIRECT NEXUS WITH THE INDUSTRIAL UNDERTAKI NG. ON THE OTHER HAND THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE DEFE NDED THE IMPUGNED ORDER BY SPECIFICALLY INVITING OUR ATTENTI ON TO PARA1.04 (PAGE3). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. THE ASSESSEE WAS IN RECEIPT OF DISCOUNT IN RESPECT OF PURCHASE OF RAW MATERIAL IN THE FORM OF GELATIN WHICH WAS USED IN ITS MANUFACTURING PROCESS. THIS FACTUAL ISSUE IS NOT CONTESTED BY THE ANY OF THE LOWER AUTH ORITIES. THE OBJECTION OF THE LOWER AUTHORITIES IS THAT SUCH DISCOUNT IS N OT AN INCOME DERIVED FROM INDUSTRIAL UNDERTAKING. SINCE THE GELATIN WH ICH IS A RAW MATERIAL IS DIRECTLY USED IN PRODUCTION THE PROFIT DERIVED THE REFROM CANNOT BE SAID TO BE NOT OUT OF INDUSTRIAL PRODUCTION AND SINCE THE A SSESSEE IS ELIGIBLE FOR 3 CLAIM OF DEDUCTION U/S 80HH AND 80I OF THE ACT ON S UCH PROFIT THE DISCOUNT RECEIVED ON PURCHASE OF RAW MATERIAL IS DI RECTLY AFFECTING ITS PROFIT. AS PER THE ACCOUNTING SYSTEM THE ASSESSEE HAS SEPARATELY CREDITED THE DISCOUNT INSTEAD OF REDUCING THE PURCH ASE PRICE OF RAW MATERIAL. THE ASSESSING OFFICER HAS DECLINED TO ALL OW BENEFIT OF DEDUCTION U/S 80HH AND 80I IN RESPECT OF THE AMOUN T OF DISCOUNT BY ALLEGING THAT THE ASSESSEE HAS NOT SET OFF THE DISC OUNT FROM THE PURCHASES. AS PER OUR CONSIDERED VIEW THE COST OF RAW MATERIAL PAID BY THE ASSESSEE IS GOING TO FORM PART OF ITS MANUFACTU RING ACCOUNT. WHETHER DISCOUNT IS DIRECTLY REDUCED FROM THE PURCH ASE PRICE OF THE GOODS SO PURCHASED OR SEPARATELY SHOWN AS A DISCOUN T IS NOT GOING TO AFFECT THE TRADING RESULTS OF THE ASSESSEE. THE DE DUCTION U/S 80HH AND 80I IS ALLOWABLE ON THE NET PROFIT WHICH IS ARRIVED AT AFTER REDUCING ALL THE EXPENSES INCLUDING THE COST OF RAW MATERIAL. THUS MERE SHOWING THE DISCOUNT ACCOUNT SEPARATELY WILL NOT AFFECT THE TRA DING RESULTS OF THE ASSESSEE AND RATHER AS PER OUR CONSIDERED VIEW MAI NTENANCE OF DISCOUNT ACCOUNT SEPARATELY CLEARLY DISCLOSES THE T RADING RESULTS AND ONE CAN KNOW AT THE END OF THE YEAR AS TO HOW MUCH DISC OUNT HE HAS RECEIVED OUT OF THE PURCHASES MADE DURING THE ENTIR E PERIOD. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ST ATED THAT THE ASSESSEE HAS NOT CO-RELATED THE DISCOUNT WITH THE B ILL NUMBER OF PURCHASES WHEREAS FROM THE DETAILS PLACED ON RECORD WE FIND THAT THE 4 ASSESSEE HAS FURNISHED FULL DETAILS OF DISCOUNT ACC OUNT DULY MENTIONING THEREIN THE BILL NUMBER OF RAW MATERIAL AGAINST WHI CH SUCH DISCOUNT WAS RECEIVED BY HIM. THUS THE OBSERVATION OF THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE MATERIAL PL ACED ON RECORD WHICH FINDS PLACE AT PAGES 3 AND 5 FOR THE ASSESSMENT YEA R 1994-95 AND AT PAGES 6 AND 7 OF THE PAPER BOOK FOR THE ASSESSMENT YEAR 1995-96. THE LEDGER ACCOUNT OF DISCOUNT CLEARLY INDICATED THE DA TE BILL NUMBER OF PURCHASES PARTY TO WHOM SUCH PURCHASES ARE MADE L EDGER FOLIO IN ITS ACCOUNT WHERE PURCHASE ENTRY HAS BEEN MADE AND THE AMOUNT OF DISCOUNT RECEIVED IN RESPECT OF SUCH BILL. IN VIEW OF THESE FACTS WE DO NOT FIND ANY JUSTIFICATION IN DISALLOWING CLAIM OF DEDUCTION U/S 80HHC & 80IA ON THE AMOUNT OF DISCOUNT AVAILED BY ASSESSEE AGAINST COST OF PURCHASES OF RAW MATERIALS. ACCORDINGLY BOTH THE A PPEALS OF THE ASSESSEE ARE ALLOWED. 5. IN ITA NOS. 217 AND 218/IND/2010 THE CONFIRMATIO N OF PENALTY LEVIED U/S 271(1) ON ACCOUNT OF DEDUCTION CLAIMED U/S 80HHC AND 80IA HAS BEEN CHALLENGED. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE PENALTY HAS BEEN IMPOSED ON DI SALLOWANCE MADE BY THE ASSESSING OFFICER. IT WAS PLEADED THAT NEITH ER THERE IS CONCEALMENT NOR FURNISHING OF INACCURATE PARTICULAR S THEREFORE NO PENALTY IS LEVIABLE. ON THE OTHER HAND THE LEARNE D SENIOR DEPARTMENTAL REPRESENTATIVE INVITED OUR ATTENTION TO PARA 1.7 (P AGE 5 OF THE IMPUGNED 5 ORDER) BY PLEADING THAT THE PENALTY HAS BEEN CONFIR MED ON THE AMOUNT FOR WHICH INACCURATE PARTICULARS OF INCOME WERE FUR NISHED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE ASSESSEE DECLARED TOTAL INCOME OF RS.2 64 52 749/- IN ITS RETURN FILED ON 29.11.2003 WHICH WAS PROCESSED U/S 143(1)( A) OF THE ACT ON 18.3.2004. SINCE THE CASE WAS SELECTED FOR SCRUTIN Y THEREFORE THE REQUISITE NOTICES WERE ISSUED TO THE ASSESSEE TO WH ICH WRITTEN SUBMISSIONS ALONG WITH OTHER DETAILS WERE FILED BY THE ASSESSEE ALONG WITH BOOKS OF ACCOUNTS AND THE SAME WERE TEST CHECK ED. THE ASSESSEE IS A MANUFACTURER EMPTY HARD GELATIN CAPSULES. THE ASSESSEE CLAIMED DEDUCTION U/S 80HHC FOR EXPORT AMOUNTING TO RS.43 1 9 720/- BEING 50% OF EXPORT PROFIT WHICH WAS AS PER THE AUDIT REP ORT IN FORM 10CCAC. AS PER THE REVENUE THE ASSESSEE ALSO CLAIMED THE R ELIEF U/S 80HHC ON OTHER INCOME ALSO WHICH IS NOT AN INCOME DERIVED FR OM EXPORT. THE ASSESSEE COMPANY ALSO CLAIMED DEDUCTION U/S 80-I AM OUNTING TO RS.31 64 000/-. THE ASSESSEE CLAIMED DEDUCTION ON EXPORT INCENTIVES (DEPB) IN VIEW OF THE DECISION IN STERLING FOODS ( 237 ITR 579). THE ASSESSING OFFICER WAS OF THE VIEW THAT NO DEDUCTION AT ALL IS ADMISSIBLE U/S 80I OF THE ACT. THE ASSESSEE VIDE LETTER DATED 14 TH FEBRUARY 2006 AND 8.3.2006 ADDRESSED TO THE LEARNED DCIT ALSO EXP LAINED THE QUERY RAISED TO THE ASSESSEE FOR CLAIMING RELIEF. THE CLA IMED DEDUCTION WAS 6 WITHDRAWN BY THE DEPARTMENT. NOW THE QUESTION ARIS ES WHETHER PENALTY CAN BE IMPOSED EVEN IF A WRONG CLAIM IS MADE BY THE ASSESSEE ESPECIALLY WHEN THE NECESSARY DETAILS WERE DULY DIS CLOSED. THE OBVIOUS REPLY IS NO NO BECAUSE A GLANCE OF THE PROVISIONS OF SECTION 271(1) OF THE ACT SUGGESTS THAT IN ORDER TO BE COVERED BY IT EITHER THERE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1) WOULD EMBRACE THE DETAILS OF CLAIM MADE. WHERE NO INFORM ATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRE TCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS TH E ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF I NCOME WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE THE LIABILI TY WOULD ARISE. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY TH E ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THE RE IS NO QUESTION OF INVITING THE PENALTY U/S 271(1). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. OUR VIEW IS FORTIFIED 7 BY THE RATIO LAID DOWN IN THE DECISION FROM THE HON BLE APEX COURT IN CIT V. RELIANCE PETRO PRODUCTS PRIVATE LIMITED (2010) 3 22 ITR 158 (SC) DILIP N SHROFF VS. JCIT; 291 ITR 519 (SC) SHRIKRIS HNA ELECTRICALS VS. STATE OF TAMIL NADU (2009) 23 VST 249 (SC) CIT V. ATUL MOHAN BINDAL; 317 ITR 1 (SC) UNION OF INDIA VS. DHARMENDRA TEXTI LES PROCESSORS; 306 ITR 277 (PARA 8 AND 9) AND UNION OF INDIA VS. R AJASTHAN SPINNING & WEAVING MILLS (2010) 1 GSTR 66 (PARA 8) (SC). IN T HE PRESENT APPEAL SINCE THERE IS NO CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF SUCH INCOME NO PENALTY IS LEVIABLE U/S 271(1) OF THE ACT. 7. IN ITA NOS. 219 AND 220/IND/2010 THE FIRST COMMO N GROUND RAISED IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACT IN CONFIRMING THE ADDITION OF RS.7 98 8 72/- AND RS.14 16 312/- MADE U/S 14A OF THE ACT INSPITE OF T HE FACT THAT THERE IS NO NEXUS BETWEEN THE EXEMPTED INCOME AND NORMAL BUS INESS EXPENDITURE. THE CRUX OF ARGUMENTS ON BEHALF OF TH E ASSESSEE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION WHEREAS THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE DEFENDED THE ADDITION SO CONFIRMED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT FOR THE ASSESSMENT YEAR 2006-07 THE ASSESSEE D ECLARED DIVIDEND INCOME OF RS.1 00 87 309/- WHICH WAS CLAIMED EXEMPT U/S 10 OF THE ACT. 8 LONG TERM CAPITAL GAIN WAS ALSO CLAIMED AS EXEMPT. THE LEARNED ASSESSING OFFICER NOTED THAT SINCE THE INCOME FROM DIVIDEND AND LONG TERM CAPITAL GAIN HAS BEEN CLAIMED AS EXEMPT THE E XPENSES INCURRED IN RELATION TO EARNING OF THIS INCOME WOULD ALSO BE DI SALLOWED AS PER THE PROVISIONS OF SECTION 14A OF THE ACT. AS PER THE P ROVISIONS OF SECTION 14A ANY EXPENDITURE INCURRED FOR EARNING THE EXEMP TED INCOME CANNOT BE ALLOWED AGAINST TAXABLE INCOME. WHILE COMPUTING THE EXEMPTED INCOME WHICH IS TAX FREE THE EXPENDITURE INCURRED FOR EARNING THE SAME IS TO BE REDUCED THEREFROM MEANING THEREBY SUCH EX PENDITURE CANNOT BE ALLOWED AGAINST THE TAXABLE INCOME. SO FAR AS T HE DIRECT EXPENDITURE WHICH IS INCURRED FOR SUCH EARNING IS CONCERNED T HE SAME IS TO BE DISALLOWED WITHOUT ANY DISPUTE. SO FAR AS THE COMMO N EXPENSES ARE CONCERNED WHICH ARE INCURRED BOTH FOR EARNING THE EXEMPTED INCOME AND TAXABLE INCOME A REASONABLE PORTION OF SUCH EX PENSES ATTRIBUTABLE TO SUCH EARNING DESERVES TO BE DISALLOWED. LOOKING TO THE NATURE OF INVESTMENT AND THE EFFORTS REQUIRED FOR MAINTAINING THE ACCOUNTS IN RELATION TO SUCH INVESTMENT A REASONABLE SUM OF CO MMON EXPENSES IS REQUIRED TO BE DISALLOWED. FOR THIS PURPOSE RULE 8 HAS BEEN INSERTED BY THE INCOME TAX (5TH ) AMENDMENT RULES 2008 WITH EF FECT FROM 24.3.2008 WHICH PRESCRIBES METHOD FOR DETERMINING T HE AMOUNT OF EXPENDITURE IN RELATION TO INCOME NOT INCLUDIBLE IN THE TOTAL INCOME. THIS 9 RULE WAS HELD TO BE EFFECTIVE RETROSPECTIVE BY THE ITAT SPECIAL BENCH IN THE CASE OF DAGA INVESTMENT (SUPRA). THE HONBLE B OMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE (SUPRA) CLARIFIED THE POSITION WITH REGARD TO APPLICABILITY OF RULE 8D AND HELD THAT RULE 8D IS N OT RETROSPECTIVE AND IS APPLICABLE ONLY WITH EFFECT FROM 24.3.2008. SINCE THE ASSESSMENT YEARS UNDER CONSIDERATION ARE 2005-06 AND 2006-07 RULE 8 D IS NOT APPLICABLE TO THESE THREE YEARS. HOWEVER THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE (SUPRA) FURTHER HELD THAT EV EN IN RELATION TO EARLIER YEAR FALLING BEFORE 24.3.2008 THE ASSESSIN G OFFICER IS EMPOWERED TO REASONABLY ESTIMATE SUCH INDIRECT EXPE NSES FOR THE PURPOSE OF DISALLOWANCE. IN THE INTEREST OF JUSTIC E AND FAIR PLAY WE RESTORE THE ENTIRE ISSUE TO THE FILE OF THE ASSESSI NG OFFICER AND THE ASSESSEE IS DIRECTED TO FURNISH FULL DETAILS OF DIR ECT AND INDIRECT EXPENSES RELATABLE TO SUCH EARNING OF EXEMPTED INCOME. THE A SSESSING OFFICER IS TO DECIDE THE ISSUE AFRESH IN TERMS OF DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODRAJ & BOYCE (SUPRA). W E DIRECT ACCORDINGLY. THEREFORE THIS GROUND IS ALLOWED FOR STATISTICAL P URPOSES. 9. THE NEXT GROUND PERTAINS TO CONFIRMING THE DISAL LOWANCE ON ACCOUNT OF MISCELLANEOUS EXPENSES AT RS.60 000/- IN EACH ASSESSMENT YEAR. THE CONTENTION RAISED ON BEHALF OF THE ASSES SEE IS THAT THE 10 DISALLOWANCE MAY BE RESTRICTED TO A REASONABLE LIMI T. ON THE OTHER HAND THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE THOU GH DEFENDED THE IMPUGNED ORDER BUT DID NOT OBJECT IF THE SAME IS RE STRICTED TO A REASONABLE AMOUNT BEING THE SMALL DISALLOWANCE INV OLVED. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED MISCELLANEOUS EXPENSES OF RS. 89 41 277/- (ASSESSMENT YEAR 2004-05) AND RS.74 98 506/- (ASSES SMENT YEAR 2007- 08). THE LEARNED ASSESSING OFFICER WHILE EXAMINING THE BOOKS OF ACCOUNTS NOTICED THAT THESE EXPENSES WERE NOT FULLY VOUCHED THEREFORE ARE OF INADMISSIBLE NATURE BY FURTHER OBSERVING THA T PERSONAL NATURE OF EXPENSES ALSO CANNOT BE RULED OUT THEREFORE HE DI SALLOWED RS.60 000/- IN EACH ASSESSMENT YEAR AS INADMISSIBLE AND ADDED T O THE INCOME OF THE ASSESSEE. ON APPEAL THE SAME WERE CONFIRMED. T HE ONLY ARGUMENT ADVANCED BEFORE US IS THAT THE SAME MAY BE RESTRICT ED TO A REASONABLE LIMIT. IN VIEW OF THIS SUBMISSION THE DISALLOWANC E IS RESTRICTED TO RS.40 000/- RESPECTIVELY IN EACH ASSESSMENT YEAR. THEREFORE THIS GROUND IS PARTLY ALLOWED. 11. THE LAST GROUND PERTAINS TO CONFIRMING THE DISA LLOWANCE ON ACCOUNT OF LONG TERM CAPITAL LOSS OF PROPERTIES AT RS.3 33 376/-. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE FUL L FACTS WERE NOT 11 CONSIDERED BY THE LEARNED ASSESSING OFFICER. ON TH E OTHER HAND THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE DEFENDED THE DISALLOWANCE. 11.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS O F LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT DURING THE YEAR THE ASSESSEE SOLD ONE INDU STRY HOUSE AND COMMERCE HOUSE ON WHICH THE ASSESSEE SHOWED LONG TE RM CAPITAL LOSS OF RS. 3 33 376/- WHICH WAS DENIED BY THE LEARNED A SSESSING OFFICER ON THE PLEA THAT THE PURCHASE AS WELL AS SALE OF THESE PROPERTIES WERE DONE THROUGH SALE AGREEMENT AND NO REGISTERED DEEDS WERE EXECUTED AND ALSO PURCHASES AND SALES WERE MADE THROUGH BUILDERS . IN THE ABSENCE OF REGISTERED DEEDS THE LEARNED ASSESSING OFFICER WAS OF THE VIEW THAT FAIR MARKET VALUE OF THESE PROPERTIES CANNOT BE ASC ERTAINED CONSEQUENTLY THE CLAIM WAS DISALLOWED. ON APPEAL STAND OF THE ASSESSING OFFICER WAS AFFIRMED. THE CLAIM OF THE A SSESSEE IS THAT SINCE IT IS A NOTIONAL LOSS AND NO SET OFF WAS TAKEN BY T HE ASSESSEE AGAINST ANY INCOME THEREFORE IT REQUIRES TO BE ALLOWED TO BE CARRIED FORWARD. 11.2 KEEPING IN VIEW FACTS AND THE ASSERTION MADE BEFORE US SECTION 2(47) DEFINES TRANSFER IN RELATION TO CAPIT AL ASSET WHICH IS REPRODUCED HEREUNDER :- 2. IN THIS ACT UNLESS THE CONTEXT OTHERWISE REQUIRES 47) 22 [TRANSFER 23 IN RELATION TO A CAPITAL ASSET INCLUDES 12 (I)THE SALE 23 EXCHANGE 23 OR RELINQUISHMENT 23 OF THE ASSET ; OR (II)THE EXTINGUISHMENT OF ANY RIGHTS THEREIN 23 ; OR (III)THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW ; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY TH E OWNER THEREOF INTO OR IS TREATED BY HIM AS STOCK-IN-TRADE OF A BUSINESS CARRIED ON BY HIM SUCH CONVERSION OR TREATMENT ;] 24 [OR] 25 [(IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON BOND; OR] 26 [(V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A 27 OF THE TRANSFER OF PROPERTY ACT 1882 (4 OF 1882) ; OR (VI)ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF OR ACQUIRING SHARES IN A CO-OPERATIVE SOCIETY COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANG EMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFER RING OR ENABLING THE ENJOYMENT OF ANY IMMOV-ABLE PROPERTY. EXPLANATION.FOR THE PURPOSES OF SUB-CLAUSES (V) A ND (VI) IMMOVABLE PROPERTY SHA LL HAVE THE SAME MEANING AS IN CLAUSE ( D ) OF SECTION 269UA ;] IF THE LANGUAGE USED IN THE AFORESAID SECTION FOR T RANSFER IN RELATION TO A CAPITAL ASSET IS ANALYSED THEN THERE IS NO REQUIRE MENTS OF REGISTERED SALE DEED BECAUSE TRANSFER INCLUDES SALE EXCHANGE OR RELINQUISHMENT OF ASSETS AND TRANSFER OF CONSTRUCTIVE POSSESSION OF I MMOVABLE PROPERTY. THERE IS NO MENTION OF FAIR MARKET VALUE IN SECTION 50(1) BESIDE THAT THE ADJUSTMENTS STATED THERE ARE WITH REFERENCE TO THE WRITTEN DOWN VALUE ONLY WHICH HAS NOTHING TO DO WITH THE FAIR MARKET V ALUE. SINCE THE EFFECTIVE TRANSFER OF POSSESSION IS NOT DISPUTED BY THE REVENUE THEREFORE THE ASSESSEE IS HAVING A GOOD CASE. THER EFORE THIS GROUND IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE AS PER THE PROVISIONS OF THE ACT AFTER AFFORDING DUE O PPORTUNITY OF BEING 13 HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO AT LIB ERTY TO FURNISH EVIDENCE IF ANY TO SUBSTANTIATE ITS CLAIM. THEREFORE BOTH THESE APPEALS ARE ALLOWED FOR STAT ISTICAL PURPOSES. FINALLY ITA NOS. 215 AND 216/IND/2010 ARE ALLOWED . ITA NOS. 217 AND 218/IND/2010 ARE ALSO ALLO WED. ITA NOS. 219 AND 220/IND/2010 ARE PARTLY ALLOWE D FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON 2 ND MARCH 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2.3.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE DN/- 14