BINOD KUMAR JHANWAR, MUMBAI v. ACIT 13(3), MUMBAI

ITA 5368/MUM/2015 | 2007-2008
Pronouncement Date: 29-11-2017 | Result: Dismissed

Appeal Details

RSA Number 536819914 RSA 2015
Assessee PAN ACOPJ1353R
Bench Mumbai
Appeal Number ITA 5368/MUM/2015
Duration Of Justice 2 year(s) 11 day(s)
Appellant BINOD KUMAR JHANWAR, MUMBAI
Respondent ACIT 13(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-11-2017
Assessment Year 2007-2008
Appeal Filed On 18-11-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI BEFORE S HRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 5368 /MUM/20 1 5 ASSESSMENT YEAR: 2007 - 2008 SHRI BINOD KUMARJHANWAR 216 LAXMI PLAZA LAXMI INDUSTRIAL ESTATE NEW LINK ROA D ANDHERI(WEST) MUMBAI - 400053 PAN: ACOPJ1353R VS. THE ACIT 13(3) AAYKAR BHAWAN MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI SUMAN KUMAR ( SR. DR) DATE OF HEARING: 29/11 /201 7 DATE OF PRONOUNCEMENT: 29/ 11 /201 7 O R D E R PER RAM LAL NEGI JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 30/11/2010 PASSED BY THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) - 24 MUMBAI FOR THE A S S ESSMENT YEAR 20 07 - 2008 WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX ACT 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL ENGAGED IN THE BUSINESS WHOLESALE TRADE IMPORTING AND SUPPLYING CHEMICALS TO VARIOUS GOVERNMENT AND SEMI GOVERNMENT ORGANIZATIONS MULTINATIONAL COMPANIES FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 25 2 5 668/ - . SINCE THE CASE WAS SELECTED FOR SCRUTINY 2 ITA NO. 5368 / MUM/2015 ASSESSMENT YEAR: 2007 - 2008 STATUTORY NOTICE U/S 143 (2) OF THE ACT WAS ISSUED. I N RESPONSE TO NOTICE U/S 142 (1) THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED THE DETAILS. AFTER VERIFICATION OF D ETAILS FILED BY THE ASSESSEE THE AO DETERMINED THE TOTAL IN COME OF THE ASSESSEE AT RS. 24 86 630/ - AFTER MAKING ADDITION OF RS. 11 61 607/ - BY TREATING SHOT TERM CAPITAL GAIN CLAIMED BY THE ASSESSEE AS BUSINESS INCOME AND MAKING DISALLOWANCE OF RS. 13 362 / - U/S 14A OF THE ACT. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BY PREFERRING FIRST APPEAL BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING THE ASS ESSEE PARTLY ALLOWED THE APPEAL. 3. STILL A GGRIEVED THE APPELLANT/ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING EFFECTIVE GROUNDS: - 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE HON CIT WAS JUSTIFIED IN DISCRIMINATING THE INCOME FROM SALE OF SHARES BASED ON THE HOLDING PERIOD OF SUCH SHARES FOR THE PURPOSE OF ASSESSING THE INCOME FOR SHARES HELD FOR 1 DAY TO LESS THAN 6 MONTHS AND SHORT TERM CAPITAL GAIN IN RESPECT OF SHARES HELD FOR PERIOD EXCEEDING SIX MONTHS BUT LESS THAN ONE YEAR. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE HON CIT AND LD. AO WAS JUSTIFIED IN PRE SUMING THE SALE AND PURCHASE OF SHARES AS BUSINESS MOTIVE AS AGAINST THE INVESTMENT MOTIVE DECLARED AND RECORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS CONSISTENTLY AND COMPLETELY IGNORING THE FACT THAT THE ASSESSEE CONSISTENTLY RECORDED THE SH ARES AS I NVESTMENTS IN HIS BALANCE SHEET AND NOT AS STOCK IN TRADE. 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE HON CIT AND LD. AO WAS JUSTIFIED IN PRESUMING THE HOLDING PERIOD AND FREQUENCY OF PURCHASE AND SALE OF SHARES AS CONCLUDING FACTORS FOR ASSESS ING THE INCOME FROM SALE AND PURCHASE OF SHARES AS BUSINESS INCOME INSTEAD OF CAPITAL GAINS. 4. THE HON CIT AND LD. AO ERRED IN IGNORING THE VITAL FACT THAT THE SALE AND PURCHASE OF BY THE ASSESSEEIS INVESTMENT MOTIVE OR BUSINESS MOTIVE SOLELY DEPENDS ON T HE DECLARATION BY THE ASSESSEE AND ITS TREATMENT IN THE BOOKS OF ACCOUNTS AT THE TIME 3 ITA NO. 5368 / MUM/2015 ASSESSMENT YEAR: 2007 - 2008 OF FILING RETURN AND CONSISTENCY OF RECORDING SUCH TRANSACTIONS IN THE PAST. 5. THE HON CIT AND LD. AO ERRED IN CONSIDERING THE FREQUENCY OF TRANSACTIONS IN SHARES AND SHOR TER HOLDING PERIOD AS CONCLUSIVE FACTORS TO DECIDE WHETHER SHARES ARE PURCHASED UNDER INVESTMENT STRATEGY OR BUSINESS STRATEGY WITHOUT TAKING COGNIZANCE OF OTHER VITAL FACTORS. 6. TO TAKE A MACRO VIEW OF THE INVESTMENT PHILOSOPHY ABOUT HEDGING AGAINST SHARP EROSION IN THE VALUE OF INVESTMENTS FOR INVESTMENTS IN HIGH RISK ASSETS AS COMPARED TO INVESTMENT IN LOW RISK ASSETS. 7. TO REVISIT THE FACTORS CONSIDERED AS DETERMINING FACTORS FOR TREATING AS BUSINESS ACTIVITY OR INVESTMENT ACTIVITY UNDER THE PRONOUNCED DECISIONS OF HONORABLE JUDICIARY IN THE PAST PARTICULARLY IN THE LIGHT OF COMPLETELY CHANGED ECONOMIC DYNAMICS OF INVESTMENTS IN HIGH RISK INSTRUMENTS. 4. THIS CASE WAS FIXED FOR HEARING ON 29/11/2017. ON THE SAID DATE W HEN THE CASE WAS CALLED FOR HEARI NG NEITHER THE ASSESSEE APPEARED IN PERSON NOR HIS AUTHORIZED REPRESENTATIVE APPEARED ON HIS BEHALF NOR ANY APPLICATION FOR ADJOURNMENT WAS RECEIVED. WE NOTICE THAT ON THE LAST DATE OF HEARING ALSO THE CASE WAS ADJOURNED DUE TO NONE APPEARANCE OF THE ASSE SSEE . ACCORDINGLY FRESH NOTICE WAS SENT THROUGH REGISTERED POST AND DESPITE THAT THE ASSESSEE FAILED TO APPEAR IN PERSON OR THROUGH HIS REPRESENTATIVE . FROM THE CONDUCT OF THE APPELLANT/ASSESSEE WE ARE SATISFIED THAT THE ASSESSEE IS NOT INTERESTED IN PUR SUING ITS APPEAL. HENCE WE DECIDED TO DISPOSE OF THE CASE ON THE BASIS OF MATERIAL ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 5. AT THE OUTSET THE LD. DR SUBMITTED THAT THERE IS AN INORDINATE DELAY OF 1754 DAYS IN FILING THE PRESENT A PPEAL AND THE AFFIDAVIT FILED BY THE ASSESSEE DOES NOT DISCLOSE ANY REASONABLE CAUSE WHICH PREVENTED THE ASSESSEE TO FILE THE APPEAL WITHIN THE LIMITATION PERIOD. THE LD. DR ACCORDINGLY SUBMITTED THAT THE REQUEST FOR CONDONATION OF DELAY MAY BE DECLINED A ND THE APPEAL OF THE ASSESSEE MAY BE DISMISSED AS NOT MAINTAINABLE BEING TIME BARRED. 4 ITA NO. 5368 / MUM/2015 ASSESSMENT YEAR: 2007 - 2008 6. WE HAVE PERUSED THE MATERIAL ON RECORD INCLUDING THE AFFIDAVIT FILED BY THE ASSESSEE. TH E CONTENTS OF AFFIDAVIT REVEAL THAT THE ASSESSEE WAS ADVISED BY THE LEGAL CONS ULTANT TO FILE THE PRESENT APPEAL AFTER EXPIRY OF LIMITATION PERIOD. THE APPELLANT/ ASSESSEE HAS RAISED THE PLEA THAT THE PRESENT APPEAL COULD NOT BE FILED BEFORE EXPIRY OF LIMITATION PERIOD BECAUSE OF A BONA FIDE BELIEF THAT SINCE THE CIT (APPEALS) ORDER HAS NOT RESULTED INTO ENHANCEMENT OF THE ASSESSED TAX LIABILITY THERE IS NO CHALLENGE THE IMPUGNED ORDER . WE NOTICE THAT THERE IS A DELAY OF 1754 DAYS IN FILING THE PRESENT APPEAL. SUB - SECTION 5 OF SECTION 253 OF THE ACT PROVIDES THAT THE TRIBUNAL MAY AD MIT APPEAL OR PERMIT FILING OF MEMORANDUM OF CROSS - OBJECTION OF RESPONDENT AFTER EXPIRY OF RELEVANT PERIOD OF LIMITATION REFERRED TO IN SUB - SECTION 3 AND 4 SECTION 253 IF THE TRIBUNAL IS SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WIT HIN THAT PERIOD. SO THE SUFFICIENT CAUSE IS THE CONDITION PRECEDENT FOR EXERCISING THE DISCRETION BY THE COURT FOR CONDONING THE DELAY. THEREFORE WHEN THE MANDATORY PROVISION IS NOT COMPLIED WITH AND THE DELAY IS NOT PROPERLY EXPLAINED THE TRIBUNAL CANN OT CONDONE THE DELAY. IN THE PRESENT CASE THE ASSESSEE HAS PRAYED FOR CONDONATION OF DELAY MAINLY ON THE GROUND THAT APPEAL WAS NOT FILED WITHIN THE LIMITATION PERIOD UNDER THE IMPRESSION THAT NO APPEAL WAS REQUIRED TO BE FILED AGAINST THE ORDER OF THE LD. CIT(A). LATER ON WHEN HE WAS ADVISED BY HIS TAX CONSULTANT THE APPEAL WAS FILED . IN OUR CONSIDERED OPINION THE PLEA TAKEN BY THE ASSESSEE IS NOT SUFFICIENT TO CONDONE THE INORDINATE DELAY OF MORE THAN 4 YEARS AS THE REASON STATED IN THE AFFIDAVIT IS NOT SUFFICIENT TO CONCLUDE THAT THE ASSESSEE HAD BEEN PREVENTED BY SUFFICIENT CAUSE FROM FILING THE PRESENT APPEAL WITHIN THE LIMITATION PERIOD . 7. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT THE REASONS MENTIONED IN THE APPLICATION ARE NOT SUFFICIENT TO CONDONE THE INORDINATE DELAY OF 1754 DAYS IN FILING THE PRESENT APPEAL. HENCE THE APPLICATION FOR CONATION OF DELAY IS DISMISSED BEING DEVOID OF MERIT. 5 ITA NO. 5368 / MUM/2015 ASSESSMENT YEAR: 2007 - 2008 8. SINCE WE HAVE DISMISSED THE APPLICATION FOR CONDONATION OF DELAY THE PRESENT APPEA L IS NOT MAINTAINABLE BEING BARRED BY THE LAW OF LIMITATION W E DISMISS THE PRESENT APPEAL AS NOT MAINTAINABLE BEING BARRED BY LAW OF LIMITATION . IN THE RESULT APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007 - 08 IS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER 2017 . SD/ - SD/ - ( B.R. BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 29 / 11 / 2017 ALINDRA PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI