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आदेश/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 13.3.2015 of the Commissioner of Income Tax (Appeals)-2, Ludhiana [hereinafter referred to as ‘CIT(A)’]
The assessee in this appeal has taken following grounds of appeal:-
1. That the learned CIT(A)-2 has erred in confirming the Treatment of Capital Gain of Rs. 86,78,342/- (consisting of Rs. 82,09,277/- being Long Term Capital -Chd-2015 M/s Hero Investment P. Ltd, Ludhiana 2 Gain exempt u/s 10(38) and Rs. 4,69,067/- being Short Term Capital Gain) as "Business Income".
2. That the learned CIT(A) has erred in considering the capital gain as "Business Income" without giving the effect of provisions of section 45(2) of the Income Tax Act.
3. That the learned CIT(A) has erred in not carrying forward brought forward unabsorbed capital loss of assessment year 2005-06 at Rs. 27,38,978/- and of assessment year 2009-10 at Rs. 4,71,23,732/-.
4. That the learned CIT(A) has erred in wrongly treating the Short Term Capital Gain & Long Term Capital Gain as "Business Income" and has failed to allow the administration & other expenses at Rs. 1,91,521/-which were disallowed in the Computation of Taxable Income.
5. That the learned CIT(A) has erred in wrongly considering the provisions of section 14A r.w. Rule 8D(iii) in respect of above expenditure even by treating the assessee as a trader of shares and treating the gain as "Business Income", though no separate addition was made as these expenses were not claimed in the computation of taxable income.
6. That the Appellant craves leave for permission to add, amend or alter any ground of appeal at the time of hearing.
3. Ground Nos. 1 & 2: The sole issue raised vide ground Nos. 1 & 2 is against the action of the CIT(A) in confirming the treatment of Capital Gains (being Long term Capital Gain exempt u/s 10(38) and Short Term Capital gains) as ‘business income’.
At the outset, both the Ld. representatives of the parties have submitted that the issue raised through above grounds of appeal
is squarely covered by the decision of the Tribunal dated 27.7.2020 in the -Chd-2015 M/s Hero Investment P. Ltd, Ludhiana 3 assessee’s own case for assessment year 2009
10. ITA No.
1450/Chd/2017. A copy of the order of the Tribunal dated 27.7.2020 (supra) has been placed on the file.
We find that the aforesaid issue involved in this appeal is squarely covered by the order of the Tribunal dated 27.7.2020 (supra) rendered in the own case of the assessee for assessment year 2009-10, wherein, the Tribunal after deliberating upon the issue has set aside the issue back to the file of the Ld. CIT(A) to be adjudicated afresh by observing as under:-
“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.
Now the assessee is in appeal.
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 -Chd-2015 M/s Hero Investment P. Ltd, Ludhiana 4 the file of the Ld. CIT(A) to be decided after considering the aforesaid referred to Circulars issued by the CBDT.
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).
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.
In the result, appeal of the assessee is allowed for statistical purposes.”
6. At this stage, the Ld. counsel has submitted that the earlier assessment year referred to in Para 9 of the above order is 2011-12 and 2012-13 instead of 2008-09. The Ld. counsel has also produced on file the copies of the orders of the CIT(A) for assessment year 2011-12 and assessment year 2012-13 both dated 30.10.2018. A perusal of the orders of the CIT(A) (supra) reveal that the CIT(A) in the said subsequent years, keeping in view the CBDT Circular No.6 of 2016 has directed the Assessing Officer to treat the income from sale and purchase of shares / securities / PMS / Mutual Funds etc. as income of the assessee under ‘capital gains’. -Chd-2015 M/s Hero Investment P. Ltd, Ludhiana 5 7. In view of the above discussion, following the order of the Tribunal dated 20.7.2020 (supra) passed in the own case of the assessee for assessment year 2009-10 and keeping in view the orders of the CIT(A) dated 30.10.2018 in subsequent assessment years 2011-12 and 2012-13, the order of the CIT(A) on this issue is set aside and the matter is restored 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. These grounds of appeal are allowed for statistical purposes.
8. Ground Nos. 3 to 5 : Ground Nos. 3 to 5 have not been pressed by the Ld. Counsel for the assessee and accordingly these are accordingly dismissed as ‘not pressed’.
9. Ground No.6: This ground is general in nature and needs no specific adjudication.
In the result, the appeal of the assessee is treated as partly allowed for statistical purposes.
Order pronounced on 01.12.2020.