DCIT 14(2), MUMBAI v. SEEMA SUNIL KUMAR GANERIWALA, MUMBAI

ITA 4383/MUM/2009 | 2005-2006
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 438319914 RSA 2009
Assessee PAN AAMPG2473M
Bench Mumbai
Appeal Number ITA 4383/MUM/2009
Duration Of Justice 2 year(s) 2 day(s)
Appellant DCIT 14(2), MUMBAI
Respondent SEEMA SUNIL KUMAR GANERIWALA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 22-07-2011
Date Of Final Hearing 13-07-2011
Next Hearing Date 13-07-2011
Assessment Year 2005-2006
Appeal Filed On 20-07-2009
Judgment Text
1 ITA NO. 4383/MUM/2009 (ASST YEAR 2005-06) IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH MUMBAI BENCHES MUMBAI BEFORE SHRI PRAMOD KUMAR AM & SHRI VIJAY PAL RAO JM ITA NO. 4383/MUM/2009 (ASST YEAR 2005-06) THE DY COMMR OF INCOME TAX MUMBAI VS SEMA SUNIL KUMAR GANERIWALA CHOTTALAL BHAVAN 1 ST FLOOR 418 KALBADEVI ROAD MUMBAI 400 063 (APPELLANT) (RESPONDENT) PAN NO. AAMPG2473M ASSESSEE BY SHRI P BAIRAGRA REVENUE BY SHRI G P TRIVEDI PER VIJAY PAL RAO JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 15.5.2009 OF THE CIT(A) FOR THE AY 2005-06. 2 THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IN THIS APPEAL IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ACCEPT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE SHORT TERM CAPITAL GAIN WITHOUT APPRECIA TING THE FACT THAT ASSESSEE HAS DONE PURCHASES AND SALE OF SHARES IN LA RGE SCALE AND AT HIGH FREQUENCY AND PERIOD OF HOLDING S ALSO NOT VERY LONG. 3 WE HAVE HEARD THE LD DR AS WELL AS THE LD AR OF T HE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE DECLARED SHORT TERM CAPITAL GAINS ON SALE OF SHARES WHICH WAS TREATED BY THE ASSESSING OFFICER AS BUSINESS INCOME AND TAXED @ 3 0% . IT HAS BEEN POINTED OUT BY THE LD AR OF THE ASSESSEE THAT THE CAPITAL GAINS DE CLARED BY THE ASSESSEE ON SALE OF SHARES BEFORE 30.9.2004 WAS SUBJECT TO TAX @ 30% AN D THEREFORE THERE IS NO TAX EFFECT BY TREATING THE SAME AS BUSINESS INCOME. 2 ITA NO. 4383/MUM/2009 (ASST YEAR 2005-06) 3.1 SO FAR AS THE SHORT TERM CAPITAL GAINS EARNED A FTER 30 9.2004 WHEN THE AMENDMENT HAS BEEN BROUGHT IN THE STATUTE WHEREBY T HE RATE OF TAX IS APPLICABLE IN CASE OF SHORT TERM CAPITAL GAINS @ 10% AS PER PROVI SIONS OF SEC. 111A. THE AMOUNT OF SHORT TERM CAPITAL GAINS EARNED AFTER 30.9.2004 IS RS. 12 78 564/- WHICH WAS TREATED BY THE ASSESSING OFFICER AS BUSINESS INCOME AND S UBJECTED TO TAX @ 30%. THIS FACTUAL POSITION HAS NOT BEEN DISPUTED BY THE LD DR . BE IT SO THE TAX EFFECT WOULD BE THE DIFFERENTIAL RATE OF 20% (30% - 10%) ON RS. 1 2 78 564/- WHICH WOULD BE LESS THAN RS. 3 LACS. 4 THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS T HAN RS.3 LAKHS AS PER THE LIMIT PRESCRIBED BY THE CBDT VIDE INSTRUCTION NO.3 OF 201 1 FOR FILING OF APPEAL BY THE REVENUE BEFORE THE TRIBUNAL. IN SUCH A SITUATION TH E APPEAL FILED IN CONTRAVENTION OF SUCH LIMIT CANNOT BE SUSTAINED. THIS VIEW IS DULY S UPPORTED BY THE DECISION IN THE CASE OF ACIT VS. SATISH CHANDRA 10 SOT 383. SIMILA R VIEW HAS BEEN TAKEN BY THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CAMCO COLO UR CO. 254 ITR 565 WHEREIN IT HAS BEEN HELD THAT THE TAX EFFECT INVOLVED IN THE A PPEAL FILED BY THE REVENUE BEING LESS THAN THE MONETARY LIMIT AS PRESCRIBED IN BOARD CIRCULAR THE SAME IS NOT MAINTAINABLE. 4.1 ACCORDINGLY IN VIEW THE CIRCULAR OF 2011 AS AP PLICABLE TO THE APPEALS FILED EARLIER THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD IN THE CASE OF CIT VS MADHUKAR K INAMDAR (HUF) REPORTED IN 318 ITR 149 THAT THE AP PEALS FILED BY THE REVENUE PRIOR TO THE CIRCULAR SHALL ALSO BE GOVERNED THE MONETARY LIMIT OF THIS CIRCULAR. SIMILAR VIEW HAS BEEN REITERATED BY THE MUMBAI BENCH OF THE TRIB UNAL VIDE ORDER DATED 3 ITA NO. 4383/MUM/2009 (ASST YEAR 2005-06) 29.04.2011 IN ITO VS INDIA SAFETY VAULTS LTD. IN I TA NO. 648-651/M/2010. RESPECTFULLY FOLLOWING THE PRECEDENTS WE HOLD THAT THE APPEAL F ILED BY THE REVENUE CANNOT BE TAKEN UP FOR DECISION ON MERITS AS THE TAX EFFECT I N THIS CASE IS ADMITTEDLY LESS THAN RS. 3.00 LACS. WE THEREFORE DISMISS THE APPEAL FILED BY THE REVENUE AS NOT MAINTAINABLE. 5. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 22 ND DAY OF JULY 2011. SD/- SD/- ( PRAMOD KUMAR ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED:22 ND JULY 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI