EKANSHA ENTERPRISES NP.LTD, MUMBAI v. ACIT (OSD) CIR 3(1), MUMBAI

ITA 962/MUM/2013 | 2009-2010
Pronouncement Date: 24-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 96219914 RSA 2013
Assessee PAN AEVPA5082K
Bench Mumbai
Appeal Number ITA 962/MUM/2013
Duration Of Justice 5 month(s) 20 day(s)
Appellant EKANSHA ENTERPRISES NP.LTD, MUMBAI
Respondent ACIT (OSD) CIR 3(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 24-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 24-07-2013
Assessment Year 2009-2010
Appeal Filed On 04-02-2013
Judgment Text
. IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI BEFORE SHRI R. K. GUPTA JM ITA NO. 962 / MUM/ 20 1 3 ( ASSESSMENT YE AR : 2009 - 20 10 ) M/S EKANSHA ENTERPRISES PVT. LTD. OFFICE NO. 84 WING A MITTAL COURT 224 NARIMAN POINT MUMBAI - 400 021 VS. ACIT (OSD) CIR 3(1) MUMBAI PAN/GIR NO. : A E VPA 5082 K ( APPELLANT ) .. ( RESPO NDENT ) /ASSESSEE BY : SHRI RAVIKANT PATHAK /REVENUE BY : SHRI O.P. SINGH DATE OF HEARING : 9 TH JULY 201 3 DATE OF PRONOUNCEMENT : 24 TH JULY 2013 O R D E R TH IS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 21 - 1 - 2003 OF CIT(A) - 6 MUMBAI RELA TING TO THE ASSESSMENT YEAR 2009 - 10 . 2 . THE ASSESSEE IS OBJECTING IN CONFIRMING THAT SECURITIES TRANSACTION TAX OF RS. 29 83 067/ - PAID ON PUR CHASE OF EQUITY SHARE DOS NOT FORM THE PART OF COST OF ACQUISITION OF EQUITY SHARES AND THEREFORE THE SAME CANNOT BE ADDED TO THE COST OF ACQUISITION OF SHARES. 3 . THE FACTS IN BRIEF ARE THAT DURING THE ASSESSMENT PROCEEDING ON VERIFICATION OF WORKING ON SHORT TERM CAPITAL LOSS OF RS.61.95 CRORES CLAIMED DURING THE YEAR THE AO NOTICED THAT WHILE ARRIVING AT SUCH FIGURE THE ASSESSEE HAS INCREASED THE COST OF PURCHASE OF SUCH EQUITY BY ITA NO. 962 /20 1 3 2 RS. 29 83 067/ - BEING STT PAID ON IT. THE AO FURTHER NOTED THAT THE VAL UE OF SALE PRICE IS ALSO REDUCED BY IT BY AN AMOUNT OF RS. 22 16 511/ - BEING STT PAID ON IT. THEREFORE VIDE NOTICE UNDER SECTION 142(1) DATED 28 - 11 - 2011 THE ASSESSEE WAS REQUESTED TO EXPLAIN AS TO WHY TOTAL STT PAID OF RS. 51 99 578/ - SHOULD NOT BE DISALLO WED FROM SHORT TERM LOSS CLAIMED IN VIEW OF THE 5 TH PROVISO TO SECTION 48. IN RESPONSE TO THE SAME THE ASSESSEE FURNISHED A DETAILED WORKING ON THE SAME VIDE LETTER DATED 14 - 12 - 2011. IT IS SEEN THAT WHILE COMPUTING THE SHORT TERM CAPITAL LOSS THE ASSESSEE HAS TAKEN SALES CONSIDERATION AS PER 5 TH PROVISO TO SECTION 48 BY INCLUDING STT PAID OF RS. 22 16 511/ - IN THE SALE VALUE OF THE SHARE. THE ASSESSEE ALSO IN THE LETTER DATED 14 - 12 - 2011 STATED THAT THE COST OF ACQUISITION IS DEFINED IN SECTION 55(2)(AA) WHIC H USES THE TERM AMOUNT ACTUALLY PAID FOR ACQUIRING THE ASSETS. HOWEVER THE AO WAS NOT SATISFIED. IN HIS VIEW THE SPECIFIC PROVISION PROVIDED UNDER THE ACT WILL PREVAIL UPON THE GENERAL PROVISION. ACCORDINGLY IN VIEW OF THE PROVISO 5 TO SECTION 48 THE AO R EDUCED THE STT PAID FROM THE CAPITAL LOSS COMPUTED BY THE ASSESSEE AND IN THIS WAY AN ADDITION OF RS. 29 83 067/ - WAS MADE BY DISALLOWING THE AMOUNT PAID ON AMOUNT OF STT ON PURCHASES OF SHARES. 4 . LEARNED CIT(A) ALSO CONFIRMED THE ORDER OF THE AO BY OBSE RVING THAT THE COST OF ACQUISITION IS DE FINED UNDER SECTION 55(2)(AA) WHICH ONLY STATES THAT THE AMOUNT ACTUALLY PAID FOR ACQUIRING THE ASSETS WOULD BE COST OF ACQUISITION BUT THE 5 TH PROVISO TO SECTION 48 STATES THAT IN COMPUTING THE INCOME CHARGEABLE UND ER THE HEAD CAPITAL GAIN IN RESPECT OF ANY SUM PAID ON ACCOUNT OF SECURITIES TRANSACTION TAX IS NOT ALLOWABLE AS ITA NO. 962 /20 1 3 3 DEDUCTION. THEREAFTER HE OBSERVED THAT THE SPECIFIC PROVISION PREVAIL OVER THE GENERAL PROVISION. ACCORDINGLY HE CONFIRMED THE ACTION OF THE AO. 5 . LEARNED COUNSEL OF THE ASSESSEE FILED WRITTEN SUBMISSION. ON THE OTHER HAND LEARNED DR PLACED RELIANCE ON THE ORDER OF CIT(A) . 6 . AFTER CONSIDERING THE ORDER OF AO AND CIT(A) I DO NOT FIND ANY INFIRMITY IN RESPECT OF DISALLOWANCE OF RS.29 83 0 67/ - PAID ON ACCOUNT SECURITIES TRANSACTION TAX WHICH AS PER PROVISO TO SECTION 48 CANNOT BE ALLOWED THEREFORE I AM NOT INCLINED TO INTERFERE IN THE FINDING OF THE CIT(A). HOWEVER I FOUND SOME WEIGHT IN THE ALTERNATIVE CONTENTION OF THE ASSESSEE THAT I F THE STT IS TO BE REDUCED FROM THE COST OF ACQUISITION THEN THE SAME SHALL ALSO BE REDUCED FROM THE SALE CONSIDERATION. THOUGH IN THE BODY OF THE ORDER OF AO IT HAS BEEN MENTIONED THAT THE AMOUNT OF STT PAID HAS BEEN REDUCED BY THE ASSESSEE HOWEVER AS PER CONTENTION OF THE ASSESSEE THROUGH WRITTEN SUBMISSION IT HAS BEEN STATED THAT THE SAME HAS NOT BEEN RE DUCED FOR THIS PURPOSE THE MATTER IS RESTORED TO THE FILE OF THE AO. IF IT IS FOUND THAT THE ASSESSEE HAS ALREADY REDUCED THE AMOUNT OF RS.2216 511/ - FROM THE SALES THEN THE ORDER OF THE AO DOES NOT REQUIRE ANY INTERFERENCE. HOWEVER IF IT IS FOUND THAT THIS AMOUNT HAS NOT BEEN REDUCED FROM THE SALE COMPONENT THEN OF COURSE IT HAS TO BE REDUCED OTHERWISE IT WILL BE A DISTORT ING FINDING BECAUSE AS P ER 5 TH PROVISO THE STT HAS TO BE REDUCED FROM THE COST THEN OF COURSE THE SAME TREATMENT HAS TO BE GIVEN IN COMPUTING SALES. IF THE AMOUNT OF STT IS INCLUDED IN SALES THEN ON THE SAME BASIS IT HAS TO BE REDUCED. ACCORDINGLY I DIRECT THE AO TO DO THE NEED FUL AS PER MY OBSERVATION MADE ABOVE. ITA NO. 962 /20 1 3 4 7 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF JU LY .2013 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI; DATED : 24/07 / 2013 /PKM PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER ( ASSTT. REGISTRAR ) / ITAT MUMBAI