MR. PREMAL NIRVAN SANGHAVI, MUMBAI v. ASST.C.I.T., CIRCLE 16(2), MUMBAI

ITA 5675/MUM/2009 | 2005-2006
Pronouncement Date: 15-09-2010 | Result: Dismissed

Appeal Details

RSA Number 567519914 RSA 2009
Assessee PAN AABPS5226P
Bench Mumbai
Appeal Number ITA 5675/MUM/2009
Duration Of Justice 10 month(s) 23 day(s)
Appellant MR. PREMAL NIRVAN SANGHAVI, MUMBAI
Respondent ASST.C.I.T., CIRCLE 16(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 15-09-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 15-09-2010
Date Of Final Hearing 17-06-2010
Next Hearing Date 17-06-2010
Assessment Year 2005-2006
Appeal Filed On 22-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI B. RAMAKO TAIAH (AM) ITA NO.5675/MUM/2009 ASSESSMENT YEAR : 2005-06 SHRI PREMAL NIRVAN SANGHAVI 62 CASA GRANDA 22 K.S. TAYABJI MARG MUMBAI-400 056. ..( APPELLANT ) P.A. NO. (AABPS 5226 P) VS. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 16(2) MATRUMANDIR MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI SATISH R. MODY RESPONDENT BY : SHRI HA RI GOVIND SINGH O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 13.8.2009 PASSED BY THE LD. CIT(A) FOR THE AS SESSMENT YEAR 2005-06. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN INDIVIDUAL DERIVES INCOME FROM BUSINESS CAPITAL GAINS AND INC OME FROM OTHER SOURCES FILED RETURN DECLARING TOTAL INCOME OF RS.10 99 889 /-. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE CLAIMED SHORT TERM CAPITAL LOSS ON MUT UAL FUND AMOUNTING TO RS.3.99 LACS. THE ASSESSEE WAS ASKED TO SUBSTANTIA TE THE LOSS CLAIMED. THE ASSESSING OFFICER AFTER CONSIDERING THE ASSESSEE'S EXPLANATION OBSERVED THAT THE ASSESSEE HAS CLAIMED SHORT TERM CAPITAL LOSS ON SALE AND PURCHASE OF MUTUAL FUNDS UNITS ON WHICH HE HAS RECEIVED DIVIDEN DS ALSO. ACCORDING TO ITA NO.5675/M/09 A.Y:05-06 2 THE ASSESSING OFFICER AS PER AMENDED PROVISIONS OF SEC.94(7) OF THE INCOME TAX ACT 1961(THE ACT) WHICH CAME INTO EFFECT FROM 1.4.2005 THAT IN CASE OF UNITS WHOSE DIVIDENDS ARE EXEMPT UNDER THE ACT AND IF SUCH PERSON BUYS OR ACQUIRES SUCH SECURITIES/UNITS WITHIN A PERIOD OF T HREE MONTHS PRIOR TO THE RECORD DATE AND THEN HE SELLS THOSE UNITS/ SECURITI ES WITHIN A PERIOD OF THREE MONTHS AFTER THE RECORD DATE OF RECEIVING SUCH DIVI DENDS THEN THE DIVIDENDS WHICH ARE EXEMPT SHALL BE SET OFF AGAINST THE LOSS ON THE SALE /PURCHASE OF SUCH UNITS/SECURITIES. HENCE AGAINST THE LOSS ON SA LE/PURCHASE OF MUTUAL FUNDS CLAIMED BY THE ASSESSEE THE ASSESSING OFFIC ER SET OFF THE DIVIDENDS RECEIVED BY THE ASSESSEE AND REDUCED THE LOSS ACCOR DINGLY AND THEREBY COMPLETED THE ASSESSMENT AT AN INCOME OF RS.149929 0/- VIDE ORDER DATED 11.12.2007 PASSED U/S.143(3) OF THE ACT. ON APPEAL THE LD. CIT(A) FOLLOWING THE PROVISIONS OF SEC.94(7) WHEREIN IT HAS BEEN PR OVIDED THAT ANY LOSS INCURRED BY THE APPELLANT ON THE SALE /PURCHASE OF UNITS WILL BE SET OFF AGAINST THE DIVIDEND INCOME EARNED FROM THOSE UNITS IRRESPE CTIVE OF THE YEAR WHEREIN THE DIVIDENDS WERE EARNED DISMISSED THE ASSESSEE' S APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL : 1. THE LD. ASSESSING OFFICER HAS ERRED IN DISALL OWING SHORT TERM CAPITAL LOSS SUFFERED BY THE APPELLANT I N RESPECT OF SALE OF MUTUAL FUND UNITS BY APPLYING THE PROVISION S OF SEC.94(7) OF THE INCOME TAX ACT 1961. 2. THE CIT(A) HAS FURTHER ERRED IN CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT RECEIVED ANY DIVIDEND WHATSOEVER D URING THE ACCOUNTING YEAR ENDED 31.3.2005 AGAINST WHICH SUCH LOSSES CAN BE ADJUSTED. YOUR PETITIONER STATES THAT SHORT TER M CAPITAL LOSS INCURRED BY THE ASSESSEE ON THE SALE OF THE MUTUAL FUND UNITS HAD TO BE ALLOWED AS SHORT TERM CAPITAL LOSS BECAUS E THERE WAS NO DIVIDEND RECEIVED BY THE ASSESSEE DURING THE ACC OUNTING YEAR ENDED 31.3.2005 AGAINST WHICH SUCH LOSSES COUL D HAVE BEEN ADJUSTED. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE VERY FAIRLY SUBMITS THAT THE ISSUES RAISED IN THE GROUNDS OF AP PEAL ARE COVERED AGAINST ITA NO.5675/M/09 A.Y:05-06 3 THE ASSESSEE AND IN FAVOUR OF THE REVENUE BY THE OR DER OF THE TRIBUNAL IN MINAL NIRVAN SANGHAVI VS. ACIT IN ITA NO.5676/MUM/ 2009 ORDER DATED 18.6.2010 FOR THE ASSESSMENT YEAR 2005-06. HE ALSO P LACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL. 5. ON THE OTHER HAND THE LD. DR WHILE RELYING ON TH E ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) ALSO RELIED ON THE ORDER OF THE TRIBUNAL IN MINAL NIRVAN SANGHAVI (SUPRA). 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE CASE OF MINAL NIRVAN SANGHAVI (SUPRA) WHEREIN THE TRIBUNAL ON THE SIM ILAR GROUNDS WHILE HOLDING THAT THE AMENDMENT IS APPLICABLE W.E.F. 1.4.2004 I.E. RELEVANT TO THE ASSESSMENT YEAR 2005-06 HAS ALSO HELD THAT ANY DIV IDEND RECEIVED OR RECEIVABLE BETWEEN THE DATES OF PURCHASE AND SALE O F UNIT WITHIN THE SPAN OF PERIOD DESCRIBED BY SEC.94(7) SHALL BE ADJUSTED AGA INST THE LOSS ARISEN FROM THE SALE OF SUCH UNITS. IN THE ABSENCE OF ANY DIST INGUISHING FEATURE BROUGHT ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE WE RE SPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA) DECLINE TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) AND ACCORDINGLY GROUNDS RAISED BY TH E ASSESSEE ARE REJECTED. 7. IN THE RESULT ASSESSEE'S APPEAL STANDS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 15.9.2010. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 15.9.2010. JV. ITA NO.5675/M/09 A.Y:05-06 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.