Income Tax Appellate Tribunal - Chandigarh
M/S Hero Investment Pvt. Ltd. (Now ... vs Acit, C-5, Ludhiana on 27 July, 2020
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "ए" , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH "A", CHANDIGARH (VIRTUAL COURT) ी एन.के.सैनी, उपा य एवं ी संजय गग$, या%यक सद'य BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, JM आयकर अपील सं./ ITA NO. 1450/Chd/2017 नधा रण वष / Assessment Year : 2009-10 M/s Hero Investment Pvt. Ltd. बनाम Asstt. CIT (Now Merged into M/s. Hero Moto Circle-V, Ludhiana Corp Ltd.) Hero Nagar, G.T. Road, Ludhiana थायी लेखा सं./PAN NO: AAACH4072N अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri Subhash Aggarwal, Advocate राज व क! ओर से/ Revenue by : Shri Arvind Sudarshan, JCIT सन ु वाई क! तार&ख/Date of Hearing : 27/07/2020 उदघोषणा क! तार&ख/Date of Pronouncement : 27/07/2020 आदे श/Order PER N.K. SAINI, VICE PRESIDENT This is an appeal by the assessee against the order dt. 17/08/2017 of Ld. CIT(A)-2, Ludhiana.
2. Following grounds has been raised in this appeal:
1. That the Ld. CIT(A)-2 has erred in holding that the assessee is a trader in mutual funds and has wrongly treated the long term capital loss of Rs.
4,71,23,732/- as business loss of the appellant.
2. That the Ld. CIT(A) has wrongly placed reliance on the judgment of the Hon'ble Punjab & Haryana High court ignoring the fact that the decision was to be taken on the basis of the Circular of CBDT no. 4/2007 dated 15/06/2007 giving guidelines for distinction between treatment of investment either as a business income or capital gain and subsequently clarified by Circular no. 6/2016 dated 29/02/2016 which was issued with the sole objective of reducing litigation and maintaining consistency in 2 approach on the issue of treatment of income derived from transfer of shares and securities.
3. That in any case the CIT(A) was wrong in not following the Circular which is binding on the revenue authority.
4. That the Appellant craves leave for permission to add, amend or alter any ground of appeal at the time of hearing.
3. From the aforesaid grounds it would be clear that only grievance of the assessee relates to the treatment of loss amounting to Rs. 4,71,23,732/- i.e; as to whether the said loss was business loss or the Long Term Capital Loss (LTCL).
4. Facts of the case in brief are that the assessee company was an investment company and earned its income from investment in shares and securities. The return of income was filed on 27/09/2009 declaring an income of Rs. 56,08,454 which was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). While filing its return of income the assessee company claimed Long Term Capital Loss of Rs. 4,71,23,732/- for the year under consideration. However, the A.O. treated the said loss as business loss.
5. Being aggrieved the assessee carried the matter to the Ld. CIT(A) who upheld the view taken by the A.O.
6. Now the assessee is in appeal.
7. Ld. Counsel for the assessee at the very outset stated that the decision relating to the nature of loss was to be taken by considering Circular No. 4/2007 dt. 15/06/2007 and the Circular No. 6/2016 dt. 29/02/2016 issued by CBDT. It was further submitted that the Ld. CIT(A) was wrong in not following the Circulars which were binding on the Revenue. Reliance was placed on the judgment of the Hon'ble Supreme Court in the case of UCO Bank Vs. CIT reported at 237 ITR 889. It was also submitted that for the A.Y. 2008-09 the Ld. CIT(A)has considered the aforesaid Circular and allowed the relief to the assessee. He requested that the matter may be restored back to the file of the Ld. CIT(A) to be decided after considering the aforesaid referred to Circulars issued by the CBDT.
38. In his rival submissions the Ld. Sr. DR although supported the orders of the authorities below and reiterated the observations made by the Ld. CIT(A) in the impugned order, however did not object if the matter be restored to the file of the Ld. CIT(A).
9. We have considered the submissions of both the parties and perused the material available on the record. In the present case it appears that the Ld. CIT(A) while deciding the issue agitated by the assessee did not consider the aforesaid Circulars No. 4/2007 dt. 15/06/2007 and 6/2016 dt. 29/02/2016 issued by the CBDT. It is also not clear how and in which circumstances the Ld. CIT(A) decided the similar issue for the A.Y. 2008-09 in assessee's favour (as claimed by the Ld. Counsel for the assessee during the course of hearing). We therefore by considering the totality of the facts as discussed hereinabove and in the absence of the clear facts on record, deem it appropriate to set aside this issue back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
10. In the result, appeal of the assessee is allowed for statistical purposes.
(Order pronounced on 27/07/2020 )
Sd/- Sd/-
संजय गग$ एन.के.सैनी,
(SANJAY GARG ) ( N.K. SAINI)
या%यक सद'य/ Judicial Member उपा य / VICE PRESIDENT
AG
Date: 27/07/2020
आदे श क! त,ल-प अ.े-षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आय/ ु त/ CIT
4. आयकर आय/ ु त (अपील)/ The CIT(A)
5. -वभागीय त न4ध, आयकर अपील&य आ4धकरण, च7डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File