Hemendra N.Gandhi,HUF, Surat v. The Dy.CIT.,Cent.Circle-2(4),, Surat

ITA 219/AHD/2008 | 2005-2006
Pronouncement Date: 21-05-2010 | Result: Allowed

Appeal Details

RSA Number 21920514 RSA 2008
Bench Ahmedabad
Appeal Number ITA 219/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 3 day(s)
Appellant Hemendra N.Gandhi,HUF, Surat
Respondent The Dy.CIT.,Cent.Circle-2(4),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 21-05-2010
Date Of Final Hearing 17-05-2010
Next Hearing Date 17-05-2010
Assessment Year 2005-2006
Appeal Filed On 17-01-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL SHRAWAT JUDICIAL MEMBER) ITA NO. APPELLANT RESPONDENT 119/AHD/2008 [AY : 2005-2006] HEMENDRA N. GANDHI 5A RATNAM BUILDING C.G. ROAD AHMEDABAD. VS DCIT CENT.CIR.2(4) AHMEDABAD. 219/AHD/2008 [AY : 2005-2006] HEMENDRA N. GANDHI (HUF) 8 MAHAVIR TOWER PALDI AHMEDABAD. VS DCIT CENT.CIR.2(4) AHMEDABAD. 120/AHD/2008 [AY : 2005-2006] DEEPAK N. GANDHI 5A RATNAM BUILDING C.G. ROAD AHMEDABAD. VS DCIT CENT.CIR.2(4) AHMEDABAD. 217/AHD/2008 [AY : 2004-2005] TRUPTIBEN HEMENDRA GANDHI 5A RATNAM BUILDING C.G. ROAD AHMEDABAD. VS DCIT CENT.CIR.2(4) AHMEDABAD. 218/AHD/2008 [AY : 2005-2006] TRUPTI HEMENDRA GANDHI 5A RATNAM BUILDING C.G. ROAD AHMEDABAD. VS DCIT CENT.CIR.2(4) AHMEDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY RANJAN REVENUE BY : DR.JAYANT JHAVERI O R D E R PER G.D. AGARWAL VICE-PRESIDENT: THESE ARE FIVE APPEALS FILED BY THE DIFFERENT ASSESSEES AGAINST THE ORDERS OF CIT(A ) AHMEDABAD. ALL THE ASSESSEES ARE INTER-RELATED. SINCE ISSUES RAISED I N ALL THE APPEALS ARE COMMON FOR THE SAKE OF CONVENIENCE WE DISPOSE OF ALL THES E APPEALS BY THIS COMMON ORDER. ITA NO.119/AHD/2008 (SHRI HEMENDRA N. GANDHI) 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE DISALLOWANCE OF DEDUCTION FOR SHORT TERM CAPITAL LO SS OF RS.85 203/- MADE BY THE ASSESSING OFFICER INVOKING SECTION 94(7) OF THE INCOME TAX ACT 1961. ITA NOS. 119 120 217 218 AND 219/AHD/2008 -2- 3. AT THE TIME OF HEARING BEFORE US IT IS STATED B Y THE LEARNED COUNSEL FOR THE ASSESSEES THAT THE AO HAS DISALLOWED THE SHORT TERM CAPITAL LOSS OF RS.85 203/- BY APPLYING THE PROVISIONS OF SECTION 9 4(7) OF THE ACT. THAT THE ORDER OF THE AO IS SELF-CONTRADICTORY BECAUSE ON O NE HAND HE HAS STATED THAT THERE WAS NO DETAILS REGARDING THE DATE OF PURCHASE AND SALE OF THE SAID MUTUAL FUND HAVE BEEN SUBMITTED BY THE ASSESSEE AND ON THE OTHER HAND HE HAS RECORDED A FINDING THAT SECTION 94(7) IS APPLICABLE . THAT SECTION 94(7) IS APPLICABLE ONLY IF THE MUTUAL FUND IS SOLD WITHIN A PERIOD OF THREE MONTHS FROM THE DATE OF PURCHASE. SINCE THE AO HIMSELF HAS MEN TIONED THAT THERE WERE NO DETAILS OF DATE OF PURCHASE AND SALES FINDING OF T HE AO WITH REGARD TO THE APPLICABILITY OF SECTION 94(7) IS OBVIOUSLY BASED O N ASSUMPTION OR PRESUMPTIONS AND THEREFORE THE SAME CANNOT BE SUS TAINED. HE THEREFORE SUBMITTED THAT THE ADDITION OF RS.85 203/- MADE BY THE AO BY DISALLOWING THE SHORT TERM CAPITAL LOSS SHOULD BE DELETED. 4. THE LEARNED DR ON THE OTHER HAND RELIED UPON T HE ORDER OF THE AUTHORITIES BELOW AND HE STATED THAT ON FACTS OF TH E ASSESSEES CASE IT WOULD BE APPROPRIATE IF THE MATTER IS SET ASIDE TO THE FILE OF THE AO AND THE ASSESSEE BE DIRECTED TO FURNISH THE REQUISITE DETAILS WITH REGA RD TO THE DATE OF PURCHASE AND SALE OF THE MUTUAL FUND AND THEREAFTER ONLY A FINAL DECISION CAN BE TAKEN WHETHER THE SECTION 94(7) OF THE ACT WOULD BE APPLI CABLE OR NOT. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED MATERIAL PLACED BEFORE US. THE AO HAS REC ORDED THE FOLLOWING FINDING WHILE APPLYING THE SECTION 94(7) OF THE ACT. IN HIS REPLY DATED 27 TH NOV.2006 THE ASSESSEE HAS STATED THAT HIS CASE IS NOT COVERED BY THE PROVISIONS OF SECTION 94 (7) OF THE IT ACT. THE ASSESSEE HAS SUBMITTED THE DETAILS REGARDING SHORT TERM CAPITAL GAIN WITH THE LETTER DATED 17.11.2006 WHICH HAVE BEEN VE RIFIED. IT IS SEEN THAT AFTER DEDUCTING SHORT TERM CAPITAL LOSS OF RS.85 20 3/- THE ASSESSEE HAS SHOWN SHORT TERM CAPITAL GAIN OF RS.4 98 199/- IN T HE COMPUTATION OF ITA NOS. 119 120 217 218 AND 219/AHD/2008 -3- INCOME. NO DETAILS REGARDING DATE OF PURCHASE AND SALE OF THE SAID MUTUAL FUND HAVE BEEN SUBMITTED BY THE ASSESSEE. AFTER DISCUSSION DISALLOWANCE O RS.85 203/- U/S.94(7) OF THE IT ACT IS MADE AND ACCORDINGLY THE SHORT TERM CAPITAL GAIN IS ENHANCED BY RS.85 203/-. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE IT ACT ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FROM THE ABOVE IT IS EVIDENT THAT THE ASSESSEE HAS SUBMITTED THE DETAILS REGARDING THE SHORT TERM CAPITAL GAIN WITH THE LETT ER DATED 17-11-2006. HOWEVER THE AO FURTHER RECORDED THE DETAILS REGARD ING THE DATE OF PURCHASE AND SALE OF THE SAID MUTUAL FUND HAVING NOT BEEN FU RNISHED. NOW WHEN THE DETAILS OF DATE OF PURCHASE AND SALE OF SHORT TERM CAPITAL LOSS IS NOT AVAILABLE ON WHAT BASIS THE AO HAS RECORDED THE FINDING OF APPLI CABILITY OF SECTION 94(7) IS NOT CLEAR. FURTHER THE ASSESSEE HAS NOT FURNISHED ANY DETAILS BEFORE US ALSO. CONSIDERING THE TOTALITY OF THE FACT SAND CIRCUMSTA NCES OF THE CASE IN OUR OPINION IT WOULD MEET ENDS OF THE JUSTICE IF THE MATTER IS SET ASIDE BACK TO THE FILE AO. WE ORDER ACCORDINGLY AND DIRECT THE AO TO ALLOW ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE DETAILS WITH REGARD TO THE DATE OF PURCHASE AND SALE OF THE MUTUAL FUND AND THEREAFTER THE AO SHOULD PASS A SPEAKING ORDER AS TO WHETHER SECTION 94(7) OF THE A CT IS APPLICABLE ON THE FACTS OF THE ASSESSEES CASE. ITA NOS.120/AHD/2008 217/AHD/2008 218/AHD/2008 AN D 219/AHD/2008 6. ONLY GROUND IN ALL THESE FOUR APPEALS IS ALSO WI TH REGARD TO DISALLOWANCE OF SHORT TERM CAPITAL LOSS BY THE AO BY APPLYING PR OVISIONS OF SECTION 94(7) OF THE ACT. BOTH THE PARTIES AGREED THAT THE FACTS IN ALL THESE CASES ARE MORE OR LESS SIMILAR TO THE FACTS IN THE CASE OF ITA NO.119/AHD/ 2008. THEREFORE ARGUMENTS IN THE CASE OF SHRI HEMENDRA N. GANDHI WOULD BE APP LICABLE IN THE REMAINING APPEALS ALSO. WE HAVE ALREADY DISCUSSED THE ISSUE AT LENGTH IN THE CASE OF SHRI HEMENDRA N. GANDHI AND FOR THE DETAILED DISCUSSION THEREIN WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW IN THE CASE OF ALL T HESE ASSESSEES AND RESTORE THE MATTER BACK TO THE FILE OF THE AO. THE AO SHOULD A LLOW ADEQUATE OPPORTUNITIES ITA NOS. 119 120 217 218 AND 219/AHD/2008 -4- TO THE ASSESSEES TO PRODUCE NECESSARY DETAILS AND T HEREAFTER WILL PASS A SPEAKING ORDER DEALING WITH THE APPLICABILITY OF SECTION 94( 7) OF THE I.T.ACT. 7. IN THE RESULT ASSESSEES APPEALS ARE DEEMED TO B E ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 21 ST MAY 2010. SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 21-05-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER AR ITAT AHMEDABAD