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TMI Blog2018 (12) TMI 1498X X X X Extracts X X X X X X X X Extracts X X X X ..... order for the sake of convenience and brevity. First we take up revenue's appeal ITA No. 567/Mum/2017 for Assessment Year [AY] 2010-11 which contest the order of the Ld. Commissioner of Income-Tax (Appeals)-50 [CIT(A)], Mumbai, Appeal No.CIT(A)50/IT-249/2015-16 dated 15/02/2016 on following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in annulling the re-assessment proceedings merely on submission made by the assessee that there was no failure on the part of the assessee to disclose truly and fully all material facts for assessment while upholding the re-opening of the re-assessment proceedings u/s.147 is valid in view of explanation 2 to section 147 of the Act" 2. On the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at concessional rate of 15%. From the aforesaid facts, it emerges that reassessment proceedings have resulted into application of higher rate of tax @30% on certain Short Term Capital Gains [STCG] of Rs. 343.94 Lacs as against 15% assessed u/s 143(3). However, there is no change in overall assessed income of the assessee. 2. The reassessment proceedings were initiated by issuance of notice u/s 148 dated 21/04/2014 which was followed by statutory notices u/s 143(2). The reasons for reopening as extracted on Page Number 2 of the reassessment order reveal that proceedings have been initiated since there was incorrect set-off of brought forward Short Term Capital Losses-Securities Transaction Tax paid (STT Paid) with Short Term Capital Gain ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in this case assessment was reopened after expiry of four years from the end of the relevant assessment year. But as per the first and second proviso to sec. 147, assessment cannot be reopened after expiry of four years from the end of the relevant assessment year unless: i) there was failure on the part of the assessee in disclosing the fully and truly all material facts or, ii) any income in relation to any asset located outside India, chargeable to tax, escaped assessment. 5.3.3 Therefore, in my view, the reopening is bad in law. Consequently, I annul the assessment. Thus, I allow the 1st and the 3rd grounds of appeal. At the same time, the grounds, on merits, were allowed by observing as under:- 7.8 I have considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the short term capital loss which are filed along with the return of income and examined by A.O. while passing the assessment order under section 143(3). 4. Rival contentions have been heard and perused. First, we take up the issue of validity of reassessment jurisdiction acquired by the Ld. AO for the impugned AY. Upon due consideration, we find that the assessee was originally assessed u/s 143(3). It is noted that Ld. CIT(A) fell in error to note that the reassessment proceedings were initiated beyond four years since impugned AY under appeal is 2010-11 and reopening has been done by issuance of notice u/s 148 dated 21/04/2014 i.e. the reassessment proceedings have been initiated within a period of 4 years from the end of relevant assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reasoning, that reassessment proceedings stood vitiated for want of fulfillment of jurisdictional condition as envisaged by law. Finding no infirmity in the stand of first appellate authority, we dismiss this ground of revenue's appeal whereas the grounds raised by assessee, under Rule 27, in this regard, stands allowed. 5. So far as the merits of the case is concerned, Ld. CIT(A), in our opinion has clinched the issue in right perspective since there is no bar under law from setting-off of the Short Term Capital Loss (STT Paid) suffered from transactions carried out through recognized stock exchange against the Short Term Capital Gains realized from off-market transactions. The same is in line with the statutory provisions of Section 74 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment (P.) Ltd. [82 Taxmann.com 415], submitted that the matter stood squarely covered in assessee's favor by the aforesaid judgment. 7. Upon careful perusal of factual matrix as well as judicial pronouncements cited before us, we concur with the stand of Ld. AR that the matter stood squarely in assessee's favour by the decision of Delhi Tribunal (Special Bench) rendered in ACIT Vs. Vireet Investment (P.) Ltd. [supra]. Upon perusal of the same, we find that Special Bench, after considering two contrary decision of Hon'ble Delhi High Court titled as CIT Vs. Goetze (India) Ltd. [2014 361 ITR 505] & PCIT Vs. Bhushan Steel Ltd. [ITA 593/2015 dated 29/09/2015], took the view favorable to the assessee in terms of ratio of decision of Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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