I.T.A. No. 1359/Ahd./2009 (Assessment Year 2004-2005). Case: Shri Munir Madhukar Thakore Vs ITO. ITAT (Income Tax Appellate Tribunal)

Case NumberI.T.A. No. 1359/Ahd./2009 (Assessment Year 2004-2005)
JudgesG.D. Agrawal, Vice President and T.K. Sharma, J.M.
IssueIncome Tax Act
Judgement DateApril 21, 2011
CourtITAT (Income Tax Appellate Tribunal)

Order:

T.K. Sharma, J.M., (In the ITAT Ahmedabad 'A' Bench)

  1. This appeal is filed by the Assessee against the order dated 12-02-2009 of the Learned Commissioner of Income Tax(Appeals)-VI, Ahmedabad for the assessment year 2004-05.

  2. Briefly stated the facts are that the Assessee is an individual. For the assessment year under appeal, he filed the return of income declaring total income of Rs. 3,170/-. The Assessing Officer framed the assessment under Section 143(1) on 21.12.2006 at a total income of Rs. 33,69,054/-. In the assessment order, the Assessing Officer made the following additions:

    i) Addition on account of unaccounted/unexplained money received on sale of property under Section 69A. Rs. 32,58,371/-

    ii) Disallowance of claim under Section 54

    iii) Treating the income/loss of Rs. 76,173/- from future and option (F and O) transactions in shares as speculative and not business income/loss

    iv) Disallowance of Rs. 19,331/- claimed as port folio management fee

    v) Disallowance of Rs. 12,010/- (Rs. 3,000/- legal fee + Rs. 9,010/- bank charges) claimed by the Assessee from earning of income from other sources.

    vi) Levy of interest under Sections 234B and 234C.

  3. On appeal, in the impugned order, the Learned Commissioner of Income Tax (Appeals), confirmed all the aforesaid additions/ disallowances including levy of interest under Sections 234B and 234C of the I.T. Act, 1961.

    3.1 Aggrieved with the order of the Learned Commissioner of Income Tax(Appeals), the Assessee is in appeal before the Tribunal on the following grounds:

  4. Ld. CIT (A) has erred in confirming addition of Rs. 32,58,371/-made by AO as unaccounted/unexplained money received on sale of the property Under Section 69A of the act. Ld. CIT (A) ought to have accepted the sale consideration of the property as per the report of the Government Approved Valuer rather than the notional value adopted by the stamp authority for the purpose of stamp duty only and ought to have deleted the addition made on conjectures, surmises and without any evidence by AO under Section 69A of the Act.

  5. The Id. CIT (A) has erred in law and on facts in confirming the action of AO in disallowing the claim of deduction Under Section 54 of the Act in respect of the purchase of new residential property. Both the lower authorities have failed to appreciate the fact that the new residential property was not constructed but purchased by the Appellant and hence the claim of deduction Under Section 54 of the act ought to have been allowed against the sale of property.

  6. The Id. CIT (A) has erred in law and on facts in confirming the action of AO in treating income/loss of Rs. 76,173/- from Future and Options transaction as speculative and not business income/loss. Ld. CIT (A) ought to have considered amendment made in Clause (d) of Section 43(5) of the Act being clarificatory and ought to have treated the loss from F and O transactions as loss from business and allowed the same to be set off against other income.

  7. The ld. CTT(A) has further erred in law and on facts in confirming the disallowance made by AO of Rs. 19, 331/- claimed as Portfolio Management Fees by the Appellant. Ld. CIT (A) has failed to appreciate that the Portfolio Management Fees paid are legitimate business expenses incurred in respect of F and O transactions that are business transactions and ought to have allowed the same Under Section 37 of the Act.

  8. Ld. CIT (A) has erred in law and on facts in confirming disallowance of deduction ofRs. 12,010/- (Rs. 3,000/- legal fees + Rs. 9,010/- bank charges) made by AO without appreciating the fact that the expenses incurred are claimed against earning of income from other sources and ought to have been allowed...

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