TaxTMI 
TaxTMI 
2013 (2) TMI 352
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; 3. On the facts and circumstances of case and in law, the directions issued by the Ld. CIT under section 263 of Act are erroneous, vague, ambiguous and untenable and, therefore the order uts 263 of the Act passed by the Ld. CIT is liable to be quashed. 4. On the facts and circumstances of case and in law, the order passed under section 263 of the Act by the Ld. CIT is bad in law as the same has been passed without application of mind and deserves to be quashed. 5. On the facts and circumstances of case and in law, the Ld. CIT erred in invoking the provisions of section 263 of the Act, and thereby directing the Assessing Officer to consider the issue of long term capital gain returned by the appellant. 6. On the facts and circumstances of case and in law, the Ld. CIT erred in invoking the provisions of section 263 of the Act, and thereby directing the Assessing Officer to consider the issue of loss in derivative trading. 2. The relevant facts are that the assessee has been dealing in shares and securities. It maintains dual portfolios, one in trading and another for capital investment. During the year the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssues. In the notice issued u/s 142(1) dated 21.4.2009 the AO raised queries regarding details of income / loss declared on account of purchase / sale of shares alongwith a note on the nature of such income and as to under which head of income such income / loss has been declared. This query was raised vide question No. 25 of the notice. Vide query No. 28 detail of income claimed to be exempt under the act in the given format was sought for. Vide letter dated 25.9.2009 thereto the assessee had furnished all the requisite details to the AO against the above queries. Again vide letter dated 28.10.2009 the assessee classified holding of two types of investment namely current investment and long term investment. The assessee also submitted the details thereof. The Ld. AR submitted further that complete details of the loss of Rs.1,87,33,352/- in derivative trading were also furnished by the assessee to the AO during the course of assessment proceedings vide letter dated 25.9.2009. Thus it is wrong to allege by the Ld. CIT that sufficient inquiries or any inquiry was not made by the AO before accepting the claimed long term capital gain and the loss in derivative trading. He submitted fu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....961. The Ld. AR submitted that all the derivatives transactions entered into were eligible transaction and were carried through recognized National Stock Exchange of India Ltd. Mumbai and as such the loss in these transactions was business loss and not speculative loss. The Ld. AR referred page No. 1 to 173 of the paper book i.e. copies of assessment order framed u/s 143(3) for the year, show cause notice issued u/s 263 of the Act, reply of the assessee submitted thereto, notice issued u/s 142(1) by the AO raising the queries and reply thereto submitted by the assessee to the AO. The Ld. AR submitted further that during the assessment year under consideration the AO has accepted the claim of long term capital gain in the order u/s 143(3). Ld. CIT(A) as per the past history of the case has also accepted the assessee's claim of short term capital gain. In the appeal filed by the revenue before the Tribunal the revenue has not raised any ground on the issue of capital gain. The Ld. AR placed reliance on the following decisions :- 1. CIT vs M/s. Escorts Ltd. (Delhi High Court order dated 1.2.2011, ITA No. 14 / 1999) 2. CIT vs. Gulmohar Finance Lt....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the claim of capital loss and held that the provisions of Explanation to section 73 cannot be applied to capital loss. In the assessment year 2005-06 the AO treated the short term capital gain as business profit. The Ld. CIT(A) allowed the assessee's appeal upheld the short term capital gain. The Tribunal also upheld the claim of short term capital gain and dismissed the revenue's appeal. In the assessment year 2006-07 long term capital gain has been accepted by the AO. Only short term capital gain was disputed by the AO. The Ld. CIT(A) allowed assessee's appeal. And the revenue went in appeal before the Tribunal which has been dismissed. In the assessment year under consideration the material fact also remained that the AO accepted the claimed long term capital gain in the order framed u/s 143(3). The Ld. CIT(A) keeping in view the past history of the case has also accepted the assesee's claim of short term capital gain. The revenue in its appeal before the Tribunal has not raised any ground on the issue of capital gain. The Hon'ble Delhi High Court in the case of CIT vs. M/s. Escorts Ltd. (Supra) has been pleased to hold that where the nature of transactions have been accepted i....