ACIT 20(3), MUMBAI v. SAJJAN MITHULAL MAKHARIA, MUMBAI

ITA 2784/MUM/2009 | 2005-2006
Pronouncement Date: 21-05-2010 | Result: Allowed

Appeal Details

RSA Number 278419914 RSA 2009
Assessee PAN AGAPM3817D
Bench Mumbai
Appeal Number ITA 2784/MUM/2009
Duration Of Justice 1 year(s) 20 day(s)
Appellant ACIT 20(3), MUMBAI
Respondent SAJJAN MITHULAL MAKHARIA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted E
Tribunal Order Date 21-05-2010
Date Of Final Hearing 13-05-2010
Next Hearing Date 13-05-2010
Assessment Year 2005-2006
Appeal Filed On 01-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI VIJAY PAL RAO JM ITA NO.2784/MUM/2009 : ASST.YEAR 2005-2006 THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 20(3) MUMBAI. VS. SHRI SAJJAN MITHULAL MAKHARIA PROP. SHREE GOPAL TEXTILES 408 SKYLARK-A LOKHANDWALA COMPLEX FOUR BUNGLOWS ANDHERI (WEST) MUMBAI 400 058. PA NO.AGAPM3817D. (APPELLANT) (RESPONDENT) APPELLANT BY : DR.ANIL KUMAR SINGH RESPONDENT BY : SHRI S.G.DANDAVATE O R D E R PER R.S.SYAL AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 29.1.2009 R ELATING TO THE ASSESSMENT YEAR 2005-2006. 2. THE ONLY GRIEVANCE RAISED THROUGH VARIOUS GROUND S IS AGAINST THE ALLOWING OF LOSS BY THE LEARNED CIT(A) FROM FUTURE TRADING (F&O ) AMOUNTING TO RS.36 99 924 AGAINST THE REGULAR INCOME FROM TRADING OF SHARES. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED LOSS OF RS. 36.9 9 LAKHS FROM FUTURE TRADING TRANSACTIONS AGAINST THE NORMAL BUSINESS INCOME. TH E ASSESSING OFFICER OBSERVED THAT THIS LOSS WAS FROM THE TRANSACTION IN THE NATU RE OF DERIVATIVES. HE HELD SUCH LOSS TO BE SPECULATIVE BY CONSIDERING THE PROVISION S OF SECTION 43(5). THE LEARNED CIT(A) OVERTURNED THE FINDING OF THE A.O. IN THIS R EGARD AND HELD THAT IT WAS IN THE NATURE OF BUSINESS LOSS. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS A COMMON SUBMISSION THAT THE ISSUE RA ISED IN THIS APPEAL HAS BEEN DECIDED BY THE SPECIAL BENCH OF THE TRIBUNAL IN SHREE CAPITAL SERVICES LTD. VS. ITA NO.2784/MUM/2009 SHRI SAJJAN MITHULAL MAKHARIA. 2 ACIT [(2009) 28 DTR (KOL.) (SB) (TRI.) 1] HOLDING THAT THE INSERTION OF CLAUSE (D) OF PROVISO TO SECTION 43(5) IS PROSPECTIVE AND ACCO RDINGLY APPLICABLE ONLY FROM ASSESSMENT YEAR 2006-2007. IN THE PERIOD PRIOR TO THAT THE LOSS ON ACCOUNT OF TRANSACTION OF DERIVATIVES HAS TO BE HELD AS SPECUL ATIVE IN NATURE. SINCE THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2005-2006 W E HOLD THAT THE VIEW POINT OF THE LEARNED CIT(A) DOES NOT MERIT ACCEPTANCE IN THE LIGHT OF THE AFORE-NOTED SPECIAL BENCH ORDER IN SHREE CAPITAL SERVICES LTD. (SUPRA) . WE CONSEQUENTLY RESTORE THE ASSESSMENT ORDER ON THIS POINT. 4. IN THE RESULT THE APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 21 ST DAY OF MAY 2010. SD/- SD/- ( VIJAY PAL RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 21 ST MAY 2010 . DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A)-XXXII MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.