Sh. Laxmi Narain Khetan, Noida v. JCIT, Noida

ITA 4307/DEL/2009 | 2004-2005
Pronouncement Date: 11-01-2010 | Result: Allowed

Appeal Details

RSA Number 430720114 RSA 2009
Assessee PAN AFRPK1398F
Bench Delhi
Appeal Number ITA 4307/DEL/2009
Duration Of Justice 2 month(s)
Appellant Sh. Laxmi Narain Khetan, Noida
Respondent JCIT, Noida
Appeal Type Income Tax Appeal
Pronouncement Date 11-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 11-01-2010
Date Of Final Hearing 11-01-2010
Next Hearing Date 11-01-2010
Assessment Year 2004-2005
Appeal Filed On 10-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI D.R.SINGH JM AND SHRI R.C.SHARMA AM ITA NO.4307/DEL/2009 ASSESSMENT YEAR : 2004-05 SHRI LAXMI NARAIN KHETAN A-41 & 42 SECTOR-2 NOIDA 201 301. PAN NO.AFRPK1398F. VS. JOINT COMMISSIONER OF INCOME TAX NOIDA RANGE NOIDA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.SAMPATH ADVOCATE AND SHRI R.K.RAGHVAN. RESPONDENT BY : SHRI B.K.GUPTA SR.DR. ORDER PER R.C.SHARMA AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 16.9.2009 FOR AY 2004-05 IN THE MATTER OF ORDER PA SSED U/S 143(3) OF THE IT ACT. 2. THE ASSESSEE IS ONLY AGGRIEVED FOR DISALLOWANCE OF SET OFF OF SHORT TERM CAPITAL LOSS OF RS.18 78 811/- ON ACCOUNT OF SALE O F ESCORT MUTUAL FUND. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT ASSESSEE ACQUIRED UNITS OF ESCORT MUTUAL FUNDS ON 20.3.2004 FOR RS.39 68 600/- AT NAV OF RS.19.943. THE NUMBER OF UNITS ACQUIRED WERE 1 98 997.141. ON 20.3.2004 THE ASSESSEE GOT BONUS UNITS NUMBERING 179 097.427 FROM ESCORTS MUTUAL FUND. THE ASSESSEE REDEEMED TH E ORIGINAL UNITS I.E. 198997.141 UNITS ON 23.3.2004 AT NAV OF 10.5016 AND GOT AN AMOUNT OF RS.20 89 788.38. ON THIS TRANSACTION THE ASSESSEE HAS CLAIMED THAT IT SHOULD BE ALLOWED THE LOSS OF RS.18 78 811.62. THE AO DISALL OWED THE LOSS BY OBSERVING THAT THE LOSS CLAIMED BY THE ASSESSEE WAS A SHAM LO SS. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE DISALLOWANCE. ITA-4307/D/2009 2 4. CONTENTION OF LEARNED AR WAS THAT CIT(A) HAS WRO NGLY CONFIRMED THE DISALLOWANCE BY APPLYING THE PROVISIONS OF SUB-SECT ION (8) OF SECTION 94 WHICH WAS INTRODUCED BY THE FINANCE (NO.2) ACT 2004 W.E. F. 1.4.2005 RELEVANT TO THE ASSESSMENT YEAR 2005-06 AND ONWARDS. AS PER LEARNE D AR RELEVANT PROVISIONS OF LAW AS APPLICABLE IN CASE OF ASSESSEE ARE CONTAINED IN SECTION 94 SUB-SECTION (7) WHEREAS DISALLOWANCE HAS BEEN WRONGLY MADE BY INVOK ING THE PROVISIONS OF SUB- SECTION (8) WHICH ARE NOT RELEVANT FOR THE AY 2004- 05 UNDER CONSIDERATION. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT S UB-SECTION (8) OF SECTION 94 WAS INTRODUCED W.E.F. AY 2005-06 THEREFORE THE SAME CA NNOT BE APPLIED FOR MAKING DISALLOWANCE OF LOSS INCURRED ON THE UNITS ACQUIRED BY HIM AND WHICH IS SOLD WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE. THE RELEVANT PROVISIONS FOR CONSIDERING/ALLOWING SUCH LOSS ARE CONTAINED UN DER SECTION 94(7) WHICH READ AS UNDER:- WHERE (A) ANY PERSON BUYS OR ACQUIRED ANY SECURITIES OR U NIT WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE; (B) SUCH PERSON SELLS OR TRANSFER SUCH SECURITIES O R UNITS WITHIN A PERIOD OF THREE MONTHS AFTER SUCH DATE; (C) THE DIVIDEND OR INCOME ON SUCH SECURITIES OR NI T RECEIVED OR RECEIVABLE BY SUCH PERSON IS EXEMPT THEN THE LOSS IF ANY ARISING TO HIM ON ACCOUNT O F SUCH PURCHASE AND SALE OF SECURITIES OR UNIT TO THE EXTENT SUCH LOSS DOES NOT EXCEED THE AMOUNT OF DIVIDEND OR INCOME RECEIVED OR RECEIVABLE ON SUCH SECURITIES OR UNIT SHALL BE IGNORED FOR THE PURPOSES OF COMPU TING HIS INCOME CHARGEABLE TO TAX. 6. IT IS CRYSTAL CLEAR THAT EVEN UNDER SUB-SECTION (7) OF SECTION 94 THE LOSS ARISING TO AN ASSESSEE ON ACCOUNT OF SECURITIES OR UNITS SOLD BY HIM TO THE EXTENT SUCH LOSS DOES NOT EXCEED THE AMOUNT OF DIVIDEND OR INCOME RECEIVED OR RECEIVABLE ITA-4307/D/2009 3 ON SUCH SECURITIES OR UNITS SHALL BE IGNORED FOR TH E PURPOSE OF COMPUTING HIS INCOME CHARGEABLE TO TAX AND ONLY THE EXCESS LOSS WILL BE ALLOWED. 7. IN VIEW OF THE ABOVE THE MATTER IS RESTORED BAC K TO THE FILE OF THE AO FOR RECOMPUTING THE AMOUNT OF LOSS TO BE CARRIED FORWAR D BY KEEPING INTO VIEW THE PROVISIONS OF SUB-SECTION (7) OF SECTION 94 AND BY TAKING INTO ACCOUNT THE AMOUNT OF DIVIDEND OR INCOME RECEIVED OR RECEIVABLE ON SUC H SECURITIES OR UNITS BY THE ASSESSEE. WE DIRECT ACCORDINGLY. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY 2010. SD/- SD/- (D.R.SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22.01.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITA-4307/D/2009 4