M.S.BALASUBRAMANIAN,KUMBAKONAM vs. DCIT CIRCLE 1, KUMBAKONAM

These three appeals filed by the assessee are directed against separate but identical orders of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi all dated 01.03.2023 relevant to assessment years 2012-13, 2013-14 & 2014-15.

Brief facts of the case are that the assessee is an individual and deriving income profit from the firm M.S. Finance and share trading business. The assessee filed his return of income for the assessment year 2012-13 admitting a total income of ₹.22,25,360/- and the same was processed under section 143(1) of the Income Tax Act, 1961 [“Act” in short]. Subsequently, the return was selected for scrutiny through CASS and notice under section 143(2) of the Act was issued on 04.09.2014. From the details filed by the assessee, the Assessing Officer noted that the assessee has claimed a loss of ₹.3,38,874/- from his share trading business and deducted this loss from the interest income including bank interest. Since, the share trading is a speculative business and any loss from the speculative business can be set off from the income from speculative business, the Assessing Officer disallowed the loss of ₹.3,38,874/- wrongly deducted from the interest income and added to the income returned. On appeal, the ld. CIT(A) dismissed the appeal of the assessee since there was no proper response from the assessee.

Similarly, the Assessing Officer has disallowed assessee’s claim of loss of ₹.12,74,336/- and ₹.7,76,866/- for the assessment years 2013-14 and 2014-15 respectively. On appeal, the ld. CIT(A) dismissed the appeal of the assessee since there was no proper response from the assessee.

On being aggrieved, the assessee is in appeal before the Tribunal for all three assessee years challenging the exparte order of the ld. CIT(A) by stating in the grounds of appeal that the ld. CIT(A) has erred in confirming the disallowance since in assessee’s brother’s case, the Department allowed the loss claimed. When these appeals were taken up for hearing none appeared on behalf of the assessee. Hence, we proceed to decide the appeals on merits after hearing the ld. DR.

We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. The Assessing Officer disallowed the loss incurred in the share trading business for the reason that the share trading is a speculative business and any loss from the speculative business can be set off from the income from speculative business. On appeal, before the ld. CIT(A), by filing copy of the appellate order in assessee’s brother Mr. M.S. Shanmugam’s case for the same assessment years, the assessee prayed that the decision of the ld. CIT(A) may be followed in his case also. However, the ld. CIT(A) dismissed the appeals filed by the assessee. We are of the considered opinion that when the assessee has relied upon the decision of the ld. CIT(A) in assessee’s own brother’s case for same assessment years on same issue, the ld. CIT(A) is liable to consider the non-applicability of the decision rendered in assessee’s brother Mr. M.S. Shanmugam’s case. Thus, we set aside the appellate order for all the assessment years under appeal and remit the matter back to the file of the ld. CIT(A) to decide the issue afresh in accordance with law by affording an opportunity of being heard to the assessee. We also direct the ld. CIT(A) to consider the case law relied on by the assessee in assessee’s brother Mr. M.S. Shanmugam’s case.

In the result, all the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 09th June, 2023 at Chennai.