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TMI Blog2012 (5) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... ny: This appeal is filed by the Assessee, aggrieved by the order of the Learned Commissioner of Income Tax, Ahmedabad-I in Appeal No.CIT/ABD-1/263/13/2010-11 dated 28.03.2011 for the assessment year 2006-2007 passed under section 263 r.w.s. 143(3) of the I.T. Act, 1961. 2. The assessee company, in the grounds of appeal, had objected to the order of the ld. CIT passed under section 263 of the Act in an illustrative and narrative manner. In this connection, the assessee's specific attention is invited to the rule 8 of the Income-tax (Appellate Tribunal) Rules, 1963 wherein it has been prescribed under the caption 'Contents of Memorandum of appeal' that "8. Every memorandum of appeal shall be written in English and shall set forth, concisely and under distinct heads, the grounds of appeal without any argument or narrative; and such grounds shall be numbered consecutively." 2.1 Turning to the issue on hand, the grievance of the assessee, to be precise, is that "the impugned order of the ld. CIT passed under section 263 of the Act is void and deserves to be annulled." 3. The assessee company engaged in the business of trading in agro products, dealing in shares, debentu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration of the assessee's submissions cited with various case laws and also for the reasons recorded in his order under section 263 of the Act, the ld. CIT observed the following: "5...The assessee was having brought forward speculation loss pertaining to AY 2001-02 which the AO has allowed to be set off to the extent profit available for this year i.e., AY 2006-07. However, in the assessee's case, the period of four years as provided in the amended s.73(4) for setting of the brought forward loss of AY 2001-02 has already expired in AY 2005- 06. Likewise, in the case of sale of shares of Independent News Services Pvt. Ltd. and Adani Wilmar Ltd., since these companies are not listed in the stock exchanges, the holding period for them to qualify as Long Term Capital is 3 years. Therefore, the profit earned out of sale of these shares should be treated as Short Term Capital Gain and not as LTCG as claimed by the assessee. From the above facts, it is apparent that during the assessment proceedings the AO has neither sought assessee's explanation on these issues nor has he called for any details to verify the veracity of assessee's claim. The AO has allowed the claim of assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue as alleged, in as much as it assessed the assessee's profit from the sale of shares of the two companies as LTCG after consideration of indexation of cost, instead of as STCG (without indexation of cost) as the other issue raised by the Ld CIT. It was also argued that the recordings of the ld. CIT in para 5 of his impugned order itself conclusively shows that even as the relevant facts were already on record and were also undisputed and for that reason both the issues raised by the CIT really raised pure questions of law requiring his own adjudication, that he had decided to set aside the assessment order for re-adjudication of these issues by the AO which conclusively showed that even after conducting the proceedings u/s 263 during which he had considered those facts, but, failed to arrive at the conclusion that the assessment order was erroneous. It was, further, submitted by the Ld. A.R that the CIT assumed jurisdiction u/s 263 of the Act under the erroneous impression that it was a settled legal position that if the AO had completed the assessment without making proper enquiry/verification, such order will always be erroneous and prejudicial to the interests of revenue; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing it as STCG without considering indexation of cost, the CIT ought to have appreciated-; (a) that the shares of both the companies, though not held by the appellant for more than 36 months (as required by the main provision of clause (42A) of s.2), the same were held by the appellant for more than 12 months as required by the proviso to that clause; and, thus, it was not open to the CIT to assume jurisdiction u/s 263 on the ground that the AO had not made proper enquiry/verification while making the present assessment ; (b) that the proviso to clause (42A) of s.2 was amended w.e.f. 1.4.1995 by insertion that 'or any other security listed in a recognized stock exchange in India or a Unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of a Mutual Fund specified under clause (23D) of section 10 or a zero coupon bond, the provisions of this clause shall have effect as if the words 'thirty-six months' the words 'twelve months' had been substituted.' That it was only axiomatic that after that amendment another amendment was made w.e.f. 1.4.206, the proviso contained the following five separate and independent categories o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard, the ld. D R relied on the decision of Komaf Financial Services Ltd v. ITO (2010) 132 TTJ 359. He submitted that in the case of sale of shares of two companies, the holding period was less than three years and, therefore, the income was under the head STCG and not LTCG since the said companies were not listed and that since the AO had allowed the claim without going into the details which were legally not allowable, the impugned order of the AO was erroneous and prejudicial to the revenue. He had, further, submitted that the action of the AO in not making proper verification and obtaining the details and thereafter allowing adjustment of income with the carry forward of loss make the assessment order passed by the AO was against the law, prejudicial to the interest of revenue and also erroneous. To support his view, the ld. D R relied on the following case laws: (i) CIT v. Himachal Pradesh Financial Corporation(2010) 186 Taxman 105 (HP) (ii) CIT v. Sunil Goyal (2009) 176 Taxman 184 (Uttarakhand); (iii) CIT v. Bhagwan Das (2005) 142 Taxman 1 (All) 6. We have heard the rival submissions made and perused the materials available from the records and also the pap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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