THE ACIT, ABAD Circle-1., Ahmedabad v. M/S CAMBAY INVESTMENT CORP. LTD., Ahmedabad

ITA 3829/AHD/2003 | 1994-1995
Pronouncement Date: 30-09-2016 | Result: Dismissed

Appeal Details

RSA Number 382920514 RSA 2003
Bench Ahmedabad
Appeal Number ITA 3829/AHD/2003
Duration Of Justice 12 year(s) 11 month(s) 21 day(s)
Appellant THE ACIT, ABAD Circle-1., Ahmedabad
Respondent M/S CAMBAY INVESTMENT CORP. LTD., Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-09-2016
Date Of Final Hearing 17-08-2016
Next Hearing Date 17-08-2016
Assessment Year 1994-1995
Appeal Filed On 09-10-2003
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI S. S. GODARA JUDICIAL MEMBER. ITA. NO.3829/AHD/2003 (ASSESSMENT YEAR:1994-95) ACIT CIRCLE-1 AHMEDABAD APPELLANT VS. M/S. CAMBAY INVESTMENT CORP. LTD. C/303-306 SUPUTH-II NR. VADAJ BUS TERMINAL ASHRAM ROAD AHMEDABAD 380013 RESPONDENT /BY REVENUE : SHRI VILAS V. SHINDE SR. D.R. /BY ASSESSEE : SHRI J. P. SHAH A.R. /DATE OF HEARING : 17.08.2016 /DATE OF PRONOUNCEMENT : 30.09.2016 ORDER PER S. S. GODARA JUDICIAL MEMBER THIS REVENUES APPEAL FOR A.Y.1994-95 ARISES AGAINS T CIT(A)-IX AHMEDABADS ORDER DATED 30.07.2003 PASSE D IN CASE ITA NO.3829/AHD/2003 (ACIT VS. M/S. CAMBAY INVESTM ENT CORP. LTD.) A.Y. 1994-95 - 2 - NO.CIT(A)-IX/SR-9/54/2001-02 IN PROCEEDINGS U/S.143 (3) R.W.S. 263 OF THE INCOME TAX ACT 1961; IN SHORT THE ACT. 2. FACTS OF THE CASE APPEAR TO BE IN A NARROW COMPA SS. THE REVENUES SOLE SUBSTANTIVE GROUND CHALLENGES THE LO WER APPELLATE ORDER TREATING ASSESSEES PROFIT DERIVED FROM SALE OF SHARES AMOUNTING TO RS.37 17 959/- AS ITS CAPITAL G AINS THEREBY REVERSING ASSESSING OFFICERS ACTION IN TAK ING IT AS BUSINESS INCOME. 3. THE ASSESSEE COMPANY TRADES IN CEMENT PAPER AC SHEETS AND PIPES ETC. THE ASSESSING OFFICER FRAMED A REGU LAR ASSESSMENT IN ITS CASE ON 28.01.1997 DETERMINING TO TAL INCOME AS RS.13 67 526/-. THE CIT THEREAFTER FOUND AN OPI NION THAT THIS REGULAR ASSESSMENT WAS ERRONEOUS CAUSING PREJU DICE TO INTEREST OF THE REVENUE. HE ISSUED SECTION 263 SHO W CAUSE NOTICE DATED 12-16/12/1997 FOR THE FOLLOWING REASON S: A PERUSAL OF THE ASSESSMENT RECORDS IN YOUR CASE R EVEALS THAT SHARES AND SECURITIES WORTH RS.47 00 048/- WERE HEL D BY YOU AS STOCK-IN-TRADE TILL 31.3.93. THE SAID STOCK WAS CON VERTED INTO INVESTMENTS ON 31.3.93 AND WERE SOLD OUT DURING THE PERIOD 1.4.93 TO 31.3.94. THE ASSESSING OFFICER IN HIS ORDER U/S.143(3) DTD.2 8.1.97 HAS ALLOWED INDEXATION OF THE SAID ASSETS EVEN DURING T HE PERIOD THEY WERE HELD AS STOCK-IN-TRADE WHICH APPEARS TO BE INC ORRECT AS PER LAW. THE PROFIT OF RS.31 17 959/- ON SALE OF THE SAID AS SETS IS TAXABLE AS REGULAR PROFIT OR AS SHORT TERRA CAPITAL GAIN. HOWE VER THE SAME HAS NOT BEEN SUBJECTED TO TAX AND CAPITAL LOSS HAS BEEN ERRONEOUSLY ADOPTED AT RS.3 53 720/-. 4. THE ASSESSEE CONTESTED THESE REASONS TO REITERAT E ITS STAND THAT ITS SHARES SOLD WERE IN FACT ITS INVESTM ENT MADE. THE CIT DECLINED THE SAME VIDE ORDER DATED 26.11.19 98 HOLDING ITA NO.3829/AHD/2003 (ACIT VS. M/S. CAMBAY INVESTM ENT CORP. LTD.) A.Y. 1994-95 - 3 - THAT THESE SHARES WERE RATHER ASSESSEES STOCK IN T RADE THAN INVESTMENTS. HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO REFRAME THE ASSESSMENT AFRESH. THE ASSESSEE FILED APPEAL ITA NO.2463/AHD/1998 BEFORE THIS TRIBUNAL. THE ASSESSI NG OFFICER IN THE MEANTIME PASSED CONSEQUENTIAL ASSESSMENT ORD ER ON 13.03.2001 IN TUNE WITH CITS DIRECTIONS HEREINABOV E TREATING ASSESSEES SHARE PROFIT INCOME AS BUSINESS INCOME. THE ASSESSEE FILED APPEAL BEFORE THE LOWER APPELLATE AU THORITY. THE CIT(A) REVERSES ASSESSING OFFICERS ACTION TO HOLD THAT ASSESSEES SHARE PROFIT HAS ARISEN FROM SHARE INVES TMENTS AND THE SAME ARE LIABLE TO BE TREATED AS CAPITAL GAINS INSTEAD OF BUSINESS INCOME. THE REVENUE HAS FILED THE INSTANT APPEAL ON 09.10.2003 AGAINST THIS LOWER APPELLATE ORDER. 5. A PERUSAL OF THE CASE FILE INDICATES THAT LOT OF WATER HAS FLOWN DOWN THE STREAM AFTER INSTITUTION OF THIS REV ENUES APPEAL. A COORDINATE BENCH OF THE TRIBUNAL IN ITS ORDER DATED 29.08.2005 UPHELD CITS SECTION 263 ORDER DATED 26. 11.1998 (SUPRA) FORMING THE BASIS OF INSTANT CONSEQUENTIAL PROCEEDINGS. THE ASSESSEE FILED TAX APPEAL NO. 240/2006 AGAINST THIS TRIBUNALS ORDER. HONBLE JURISDICTIONAL HIGH COUR T IN ITS DETAILED JUDGMENT 16.06.2016 AS RECTIFIED SUBSEQUEN TLY ON 28.07.2016 CONCLUDES THAT ASSESSEES SHARES WERE IT S INVESTMENTS AND NOT STOCK IN TRADE. THE REVENUE FA ILS TO REBUT THIS CLINCHING FACT. HONBLE HIGH COURTS ORDER FO RMS PART OF THE CASE FILED BEFORE US. WE ACCORDINGLY HOLD THAT ONC E THEIR LORDSHIPS HAVE HELD ASSESSEES SHARES TO BE ITS INV ESTMENTS AND NOT STOCK IN TRADE PROFITS ARISING FROM SALE THERE OF HAVE TO BE ITA NO.3829/AHD/2003 (ACIT VS. M/S. CAMBAY INVESTM ENT CORP. LTD.) A.Y. 1994-95 - 4 - TREATED AS CAPITAL GAINS ONLY. THE REVENUES SOLE SUBSTANTIVE GROUND THUS FAILS. 6. THIS REVENUES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF SEPTEMBER 2016.] SD/- SD/- (PRAMOD KUMAR) (S. S. GODA RA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 30/09/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ()*+ --. ./0 / DR ITAT AHMEDABAD 1+23 / GUARD FILE. BY ORDER / . // ./0