Swastika Investmart Ltd, Mumbai vs Assessee

आयकर अपीलीय अिधकरण, अिधकरण मुंबई Ûयायपीठ मुंबई ।

IN THE INCOME TAX APPELLATE TRIBUNAL "H " BENCH, MUMBAI

सव[ौी आई.पी.बंसल, Ûयाियक सदःय. एवं ौी राजेÛि, लेखा सदःय के सम¢ BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM

आयकर अपील सं./I.T.A. No.761/MUM/2011 ( िनधा[रण वष[ / Assessment Year : 2007-08

Swastika Investment Ltd., बनाम Asstt. Commissioner of Income बनाम/ 1 s t Floor, Bandookwala Bldg., Vs. Tax, Cir.4(2), British Hotel Lane, Mumbai Fort, Mumbai 400 001

ःथायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AABCS 6585J (अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondent) आयकर अपील सं./I.T.A. No.1071/MUM/2011 ( िनधा[रण वष[ / Assessment Year : 2007-08

Asstt. Commissioner of Income बनाम/ बनाम Swastika Investment Ltd., Tax, Cir.4(2), st Vs. 1 Floor, Bandookwala Bldg., Mumbai British Hotel Lane, Fort, Mumbai 400 001

ःथायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AABCS 6585J (अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondent)

Assessee by Shri Vimal Punmiya Revenue by : Shri Jeetendra Kumar

सुनवाई कȧ तारȣख / Date of Hearing : 12/01/2015 घोषणा कȧ तारȣख /Date of Pronouncement : 12/01/2015

आदे श / O R D E R

PER I.P.BANSAL,J.M:

These are cross appeals and they are directed against ex-parte order passed by Ld.CIT(A)-8, Mumbai dated 29/11/2011 for assessment year 2007-08. Grounds of appeal raised by assessee as well as Revenue read as under:

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Grounds of assessee's appeal:

1. The learned A.O has erred in disallowing depreciation of Rs.9,75,000/- claimed on intangible assets purchased from M/s. Monalisa Infotech Ltd.

Grounds of Revenue's Appeal:

1. (i) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made in respect of Transaction charges of Rs.

12,04,913/- u/s.40(a)(ia), without appreciating the facts that these were composite charges for professional and technical services rendered by the stock exchange to its members and the assessee has failed to deduct TDS thereon.".

ii. " On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in ignoring the fact that these services are essential in nature as they can only be availed by members of Stock Exchange."

iii. "On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in ignoring the facts that use of technology and algorithmic based programs have converted an erstwhile physical market into a digitally operated market."

iv. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the fact that the services rendered by the brokers are not standard services but services that has been developed to cater to the needs of the broker community to facilitate trading."

v. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has overlooked the fact that the brokers have in subsequent years themselves started deducting the TDS on such payments and that there is no reason to give a different treatment in this year."

2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in following the ratio of the Hon'ble Supreme Court judgment in the case of M/s. Techno Shares Private Ltd Vs CIT reported in the ITR, when the facts have substantially changed past 2005. The BSE card ceased to exist in FY:2005-06 after demutualization. The entire cost of the card got transferred to the 10,000 shares of BSE allotted on demutualization, ie. the value of the card became nil in terms of section 47(xiiia) read with section 55(2)(ab)."

3 "On the facts and circumstances of the case and in law, the impugned order of the Ld.CIT(A) is contrary to law and consequently merits to be set aside and that of the Assessing Officer be restored."

2. The assessee has also raised an additional ground, which read as under:

"3. The Ld. CIT(A) has erred in passing the ex-parte order and the assessee was not given further opportunity of being heard."

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3. It was submitted by Ld. AR that additional ground is a legal ground. It was submitted that Ld. CIT(A) is required to dispose of the appeal after giving the assessee a reasonable opportunity of heard. Ld. AR submitted that no notice was served upon the assessee by Ld. CIT(A) and while passing ex-parte order also Ld. CIT(A) did not specifically say that the notices issued by him were served upon the assessee. He invited our attention towards following observations of Ld. CIT(A) vide which Ld. CIT(A) has proceeded to decide the appeal filed by the assessee ex-parte, qua the assessee.

"1.The hearing for the appeal had been fixed on 26.10.2010 and 16.11.2010. However, neither any representation was made, either oral or written nor any request for adjournment had been made. The appeal is, therefore, decided on the basis of material available on record."

4. On the admission of addition ground we have heard both the parties. There is a force in the contention of the assessee that Ld. CIT(A) was required to give reasonable and sufficient opportunity to the assessee of being heard before the appeal filed by the assessee could be disposed of. From the above observation of Ld. CIT(A) it is clear that there is no specific finding given by him that whether any notice of hearing was sent to the assessee or that notice was properly served upon the assessee. In this view of the situation, after hearing both the parties, we admit the additional ground raised by the assessee and hold that the Ld. CIT(A) has not been given reasonable and proper opportunity of hearing to the assessee. Therefore, the appeal filed by the assessee as well as Revenue are required to be restored back to the file of Ld. CIT(A) for re- adjudication afresh after giving the assessee a reasonable opportunity of hearing. Ld. AR did not express any grievance regarding restoration of the issue raised by the Revenue in its appeal. The entire issue raised by the Revenue would also be re-adjudicated after giving the assessee a reasonable opportunity of hearing.

5. To ensure compliance on behalf of the assessee, we direct the assessee to represent the hearing before Ld. CIT(A) on 12/03/2015, which date was duly noted by Ld. AR and he assured that assessee would comply with the directions given by the Bench for appearance before Ld. CIT(A).

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6. Since we are restoring both these appeals to the file of Ld. CIT(A), we do not express any opinion on any of the issues raised in both these appeals as the same will be re-adjudicated by Ld. CIT(A) as per directions given above.

7. In the result, both the appeals are treated to be allowed for statistical purposes in the manner aforesaid.

Order pronounced in the open court on 12/01/2015 . आदे श कȧ घोषणा खुले Ûयायालय मɅ Ǒदनांकः 12/01/2015 को कȧ गई ।

Sd/- Sd/- राजेÛि (RAJENDRA) आई.पी.बंसल (I.P.BANSAL) लेखा सदःय /ACCOUNTANT MEMBER Ûयाियक सदःय /JUDICIAL MEMBER मुंबई Mumbai; Ǒदनांक Dated 12/01/2015

आदे श कȧ ूितिलǒप अमेǒषत/Copy षत of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. ू×यथȸ / The Respondent. 3. आयकर आयुƠ(अपील) / The CIT(A)- 4. आयकर आयुƠ / CIT

5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड[ फाईल / Guard file.

आदे शानुसार/ ार BY ORDER, स×याǒपत ूित //True Copy// उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai

व.िन.स.Vm , Sr. PS