ACIT 10(2), MUMBAI v. BHUPINDER INVESTMENT CO. P.LTD, MUMBAI

ITA 3065/MUM/2010 | 2006-2007
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 306519914 RSA 2010
Assessee PAN AAACB9117G
Bench Mumbai
Appeal Number ITA 3065/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 3 day(s)
Appellant ACIT 10(2), MUMBAI
Respondent BHUPINDER INVESTMENT CO. P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 22-07-2011
Date Of Final Hearing 14-07-2011
Next Hearing Date 14-07-2011
Assessment Year 2006-2007
Appeal Filed On 19-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH MUMBAI BEFORE SHRI N.V. VASUDEVAN JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 3065/MUM/2010 (ASSESSMENT YEAR: 2006-07) A C I T - 10(2) M/S. BUPINDER INVESTMENT ROOM NO. 432 4TH FLOOR CO. PVT. LTD. AAYAKAR BHAVAN M.K. ROAD VS. 27 KIROL VIDHYA VIHAR (W) MUMBAI 400020 MUMBAI 400059 PAN - AAACB 9117 G APPELLANT RESPONDENT CO NO. 40/MUM/2011 (ASSESSMENT YEAR: 2006-07) M/S. BUPINDER INVESTMENT A C I T - 10(2) CO. PVT. LTD. ROOM NO. 432 4TH FLOOR 27 KIROL VIDHYA VIHAR (W) VS. AAYAKAR BHAVAN M.K. ROAD MUMBAI 400059 MUMBAI 400020 PAN - AAACB 9117 G CROSS OBJECTOR APPELLANT IN APPEAL REVENUE BY: SHRI JITENDRA YADAV ASSESSEE BY: SHRI KETAN PANCHMIA O R D E R PER B. RAMAKOTAIAH A.M. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE CIT(A) XXI MUMBAI DATED 01-02-2010 AND THE CROSS OBJECTION IS BY THE ASSESSEE AGAINST THE DISALLOWANCE UNDER SECTION 14A OF THE I .T. ACT. 2. BRIEFLY STATED ASSESSEE CLAIMED AN AMOUNT OF ` 7 32 107/- AS DEDUCTION FROM SHORT TERM CAPITAL GAINS HAVING PAID FOR PORTFOLIO MANAGEMENT SERVICES TO M/S. RELIANCE PMS ON THE ICI CI PMS. THE SAID EXPENDITURES WERE INCURRED WHILE EARNING SHORT TERM CAPITAL GAINS OF ` 53 40 362/- AND ` 45 34 937/- FROM THESE TWO COMPANIES. IT WAS ASSESS EES CLAM THAT THE EXPENSES OF PORTFOLIO MANAGEMENT WERE EXCLUSIVELY INCURRED FOR EARNING SHORT TERM CAPITAL GAINS WITHOUT WHICH ASSESSEE COULD NOT HAVE EARNED THE SHORT TERM CAPITAL GAINS. THE A.O. DISAL LOWED THE SAME HOLDING ITA NO. 3065/MUM/2010 &CO 40/M/2011 M/S. BUPINDER INVESTMENT CO. PVT.LTD . 2 THAT THE EXPENDITURES ARE NOT IN CONNECTION WITH TR ANSFER OF SHARES. THE CIT(A) AFTER HEARING ASSESSEES SUBMISSION HELD TH AT THE EXPENDITURES WERE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH ACQUISITION AND TRANSFER OF SHARES. THEREFORE HE DIRECTED THE A.O. TO ALLOW THE PMS EXPENSES. 3. AT THE OUTSET THE LEARNED COUNSEL SUBMITTED THAT TH E APPEAL BY THE REVENUE IS NOT MAINTAINABLE AS THE TAX EFFECT INVOL VED ON THE ISSUE IN APPEAL IS ONLY ` 82 142/-. THE WORKING IS AS UNDER: - PMS EXPENSES CLAIMED AGAINST SHORT TERM CAPITAL GAIN ` 7 32 107/- TAX UNDER SECTION 112 @10% ` 73 211/- SURCHARGE ` 7 321/- EDUC CESS @@5 ` 1 611/- ------------- ` 82 142/- ========= 4. IT WAS HIS SUBMISSION THAT EVEN IN THE ALTERNATE TH AT THE SHORT TERM CAPITAL GAIN IS CONSIDERED AS BUSINESS INCOME ALSO THE TAX EFFECT IS ONLY ` 2 46 427/- AND FOLLOWING THE JUDGEMENT OF THE HON'B LE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MADHUKAR K. INAMDAR (HUF) 31 8 ITR 149 THE APPEAL IS NOT MAINTAINABLE ON SMALL TAX BASIS. THE CBDT CIRCU LAR ISSUED WILL BE APPLICABLE TO ALL CASES PENDING IN APPELLATE FORUMS . IT WAS THE SUBMISSION THAT THE PRESENT LIMIT OF ` 3 00 000/- FOR PREFERRING APPEAL MAKES THE REVENUE APPEAL NON-MAINTAINABLE AS THE TAX EFFECT I S LESS THAN ` 3 00 000/-. HE PLACED ON RECORD THE ORDER OF THE COORDINATE BEN CH IN THE CASE OF ITO VS. LAXMI JEWEL PVT. LTD. ITA NO. 2165/MUM/2010 DATED 1 2.04.2011 IN SUPPORT OF THE ALTERNATE CONTENTION. 5. THE LEARNED D.R. WHILE ACCEPTING THAT THE TAX EFFE CT IS LESS IN THIS CASE HOWEVER CONTESTED THAT AT THE TIME OF PREFER RING THE CASE THE LIMIT WAS ONLY ` 2 00 000/- THEREFORE THE ALTERNATE CONTENTION NEE D NOT BE CONSIDERED. 6. WE HAVE CONSIDERED THE ISSUE. WITHOUT GOING INTO TH E MERITS WHETHER THE REVISED TIME LIMITS WILL APPLY TO THE PENDING T HE APPEAL OR NOT AS SEEN FROM THE ORDER THE SHORT TERM CAPITAL GAIN EARNED BY THE ASSESSEE WAS TAXED AT 10% AND NOT AS BUSINESS INCOME. ACCORDINGLY THE TAX EFFECT INVOLVED ON ITA NO. 3065/MUM/2010 &CO 40/M/2011 M/S. BUPINDER INVESTMENT CO. PVT.LTD . 3 THE PMS EXPENSES CLAIMED AGAINST THE SHORT TERM CAP ITAL GAIN WAS ONLY ` 82 142/- AS SUBMITTED BY ASSESSEES COUNSEL. IN VIE W OF THIS REVENUE SHOULD NOT HAVE PREFERRED THE APPEAL ACCORDING TO T HE THEN EXISTING INSTRUCTIONS OF THE BOARD. THEREFORE WITHOUT GOING INTO THE MERITS OF THE CASE OR THE ALTERNATE CONTENTIONS RAISED BY THE ASS ESSEE WE HOLD THAT THE APPEAL IS NOT MAINTAINABLE ON TAX EFFECT ISSUE. ACC ORDINGLY THE APPEAL IS DISMISSED AS NON-MAINTAINABLE. 7. SINCE THE APPEAL ITSELF IS TREATED AS NON-MAINTAINA BLE ASSESSEES CROSS OBJECTION RAISED ON THE ISSUE OF 14A ALSO BECOMES N ON-MAINTAINABLE. 8. IN THE RESULT BOTH THE APPEAL AND THE CROSS OBJECT ION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011. SD/- SD/- (N.V. VASUDEVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 22 ND JULY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XX1 MUMBAI 4. THE CIT X MUMBAI CITY 5. THE DR F BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.