1 IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4062 OF 2015 [@ SPECIAL LEAVE PETITION NO. 22509 OF 2013] COMMISSIONER OF INCOME TAX-IV, NAGPUR Petitioner(s) VERSUS SUNIL VISHWAMBHARNATH TIWARI Respondent(s) Order Leave granted. We have perused impugned order dated 28.11.2011 passed by High Court of Judicature of Bombay, Nagpur Bench. Upon perusal of impugned order, we find that said order is not reasoned order as High Court has not recorded any reason for dismissing appeal. Looking at aforesaid fact, we are of view that it would be just and proper if matter is remanded to High Court so that matter can be considered on merits and High Court can decide same after recording reasons for arriving at particular conclusion. impugned order is, therefore, set aside and Signature Not Verified Digitally signed by appeal is allowed with no order as to costs. Jayant Kumar Arora Date: 2015.04.29 17:10:08 IST Reason: 2 Needless to say that it would be open to parties to raise all contentions before High Court which might be available to them in accordance with law.J. [ ANIL R. DAVE ]J. [ V. GOPALA GOWDA ] ..J. [ C. NAGAPPAN ] New Delhi; April 21, 2015. 3 ITEM NO.14 COURT NO.3 SECTION IIIA SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C) No(s). 22509/2013 (Arising out of impugned final judgment and order dated 28/11/2011 in ITA No. 2/2011 passed by High Court Of Bombay At Nagpur) COMMISSIONER OF INCOME TAX-IV, NAGPUR Petitioner(s) VERSUS SUNIL VISHWAMBHARNATH TIWARI Respondent(s) (with appln. (s) for c/delay in filing SLP and c/delay in refiling SLP and interim relief and office report) Date : 21/04/2015 This petition was called on for hearing today. CORAM : HON'BLE MR. JUSTICE ANIL R. DAVE HON'BLE MR. JUSTICE V. GOPALA GOWDA HON'BLE MR. JUSTICE C. NAGAPPAN For Petitioner(s) Mr. Guru Krishna Kumar, Sr. Adv. Mr. Arijit Prasad, Adv. Mr. S. A. Haseeb, Adv. For Mrs. Anil Katiyar, Adv. For Respondent(s) Mr. V. C. Daga, Sr. Adv. Mr. Nishant Ramakantrao Katneshwarkar, Adv. Ms. Ritu Rastogi, Adv. UPON hearing counsel Court made following O R D E R Leave granted. Civil Appeal is allowed in terms of signed order. (Jayant Kumar Arora) (Sneh Bala Mehra) Sr. P.A. Assistant Registrar (Signed order is placed on file) IN INCOME TAX APPELLATE TRIBUNAL,JAIPUR BENCHES (SMC), JAIPUR BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBERITA No. 634/JP/2015 Assessment Year : 2003-04 Smt. Smita BhargavacukeThe ITO B-85, Ganesh Marg, Bapu Nagar, Vs. Ward- 6 (4) Jaipur Jaipur PAN/GIR No.: ABFPB 2570 G AppellantRespondentAssessee by: Shri Rajeev Sogani , CARevenue by :Shri R.A. Verma, Addl CIT-. DRDate of Hearing :02/8/2016Date of Pronouncement : 10 /08/2016 ORDER PER BHAGCHAND, AM assessee has filed appeal against order of ld. CIT(A)-2, Jaipur dated 21-04-2015 for assessment year 2003-04 raising therein following grounds:- 1. In facts and circumstances of case and in law th4e ld. CIT(A) has erred in confirming action of AO in not allowing set off of Rs. 1,12,414/- of Short term capital loss against business income. 2. In facts and circumstances of case and in law ld. CIT(A) has erred in confirming action of the2ITA No. 634/JP/2015Smt. Smita Bharagava vs. . ITO, Ward- 6 (4), Jaipur . AO in adding sum of Rs. 23,790/- from following parties to interest income of assesseeS.N. ParticularsAmount1. M/s. Vijay Electronics Rs. 8,190/-2. M/s. Deepak Finance & Leasing Co. Rs. 15,600/-3. In facts and circumstances of case and in law ld. CIT(A) has erred in confirming action of AO in estimating income from Nath Mobiles at Rs. 1,00,000/- against declared income of Rs. 80,468/- which resulted into trading addition of Rs. 19,532/-.4.In facts and circumstances of case and in law ld. CIT(A) has erred in confirming action of AO in estimating income from M/s. Nath Lenses and Hearing Aid Center at Rs. 1,00,000/- against declared income of Rs. 83,592/- which resulted into trading addition of Rs. 16,408/-. 2.1 Apropos Ground No. 1, AO observed that during year under consideration assessee had claimed short term capital loss of Rs. 1,21,414/- on account of sale of Mobile Van in profit and loss account. AO noticed that as per Section 50 of I.T. Act short term capital loss cannot be set off against business income. AO thus asked assessee to submit reply in this regard but in spite of providing various opportunities by AO, assessee fail to submit reply. Hence, claim of loss of Rs. 1,21,414/- was disallowed and added in total income of assessee by AO. 3ITA No. 634/JP/2015 Smt. Smita Bharagava vs. . ITO, Ward- 6 (4), Jaipur . 2.2 Being aggrieved, assessee carried matter before ld. CIT(A) who has confirmed action of AO by observing as under:-4.3 I have perused facts of case, assessment order and submissions of appellant. loss incurred by appellant on sale of mobile is short term capital loss u/s 50C of I.T. Act. This short term capital loss is loss under head Capital Gains and cannot be set off against business income, notwithstanding fact that this loss has arisen on business asset. This is because in such cases of depreciable assets, income /loss therefom is considered to be taxable under head capital gains. Therefore, it is held that short term capital loss cannot be set off against business income. This ground is dismissed. 2.3 During course of hearing, ld. AR of assessee prayed for allowing set off of Rs. 1,12,414/- of short term capital loss against business income. 2.4 ld. DR relied on orders of lower authorities. 2.5 I have heard rival contentions and perused materials available on record. I do not feel to elaborate issue again as ld. CIT(A) has rightly taken into consideration all aspects of issue in question and held that short term capital loss cannot be set off against business income. Therefore, I concur with findings of ld. CIT(A) on this issue. Hence, Ground No. 1 of assessee is dismissed.4ITA No. 634/JP/2015Smt. Smita Bharagava vs. . ITO, Ward- 6 (4), Jaipur . 3.1 Apropos Ground No. 2, AO observed that assessee had claimed TDS of Rs. 4,453/- deducted on interest of Rs. 42,410-/ which was received by assessee from following parties. 1. M/s. Vijay ElectronicsRs. 8190/- 2. M/s. Deepak Finance & Leasing Co. Rs. 15600/- 3. Precise TurnerRs. 18620/-Total Rs. 42410/- On perusal of records available before AO, he noticed that assessee had not shown interest amount received from M/s. Deepak Finance & Leasing Co. and M/s. Vijay Electronics in her total income. AO made enquiry from assessee for not showing interest amount received from these two parties but assessee failed to submit any explanation to this effect. Hence, AO added sum of Rs. 23,790/- (Rs. 15600+8190) to total income of assessee. 3.2 Being aggrieved, assessee carried matter before ld. CIT(A) who has confirmed action of AO by observing as under:-5.3 I have perused facts of case, assessment order and submissions of appellant. appellant has claimed TDS of Rs. 4,453/- on interest income from above two concerns of Rs. 23 790/-. Yet interest income has not been disclosed by assessee in return of income on ground that interest income is accounted for, on cash basis. This explanation of appellant is not acceptable. When appellant has claimed credit for TDS, corresponding income has to be offered for taxation. addition of interest income made by Assessing Officer is upheld. This ground is dismissed.5ITA No. 634/JP/2015Smt. Smita Bharagava vs. . ITO, Ward- 6 (4), Jaipur . 3.3 During course of hearing, ld. AR of assessee prayed for deletion of addition confirmed by ld. CIT(A) on account of interest income. 3.4 ld. DR relied on orders of lower authorities. 3.5 I have heard rival contentions and perused materials available on record. It emerges from records that assessee had claimed TDS of Rs. 4,453/- on interest income of Rs. 23,790/- from above two concerns. It is also noted that interest income had not been disclosed by assessee in return of income on ground that interest income is accounted for, on cash basis. It is felt that when assessee has claimed credit for TDS, corresponding income is to be offered for taxation. Hence, considering entirety of facts and circumstances of case, I find no reason to interfere with order of ld. CIT(A) on this issue which is sustained. Thus Ground No. 2 of assessee is dismissed. 4.1 Apropos Ground No. 3 and 4 of assessee, it is noted that assessee has shown net profit of Rs. 80,465/- from M/s. Nath Mobile and Rs. 83,592/- from M/s. Nath Contact Lense and Earing Aid. Both are proprietary concerns of assessee. AO simply asked assessee 6ITA No. 634/JP/2015 Smt. Smita Bharagava vs. . ITO, Ward- 6 (4), Jaipur . to estimate income at Rs. 1.00 lac from these two proprietary concerns totaling to Rs. 2.00 lacs as assessee had not submitted books of account, vouchers of expenses and other required details before him. Since assessee had not submitted books of account, AO therefore, rejected books of account of assessee and net profit was estimated at Rs. 2.00 lacs for both concerns as against Rs. 1,64,060/- shown by assessee. AO thus made trading addition of Rs. 35,940/- and added same in income of assessee as assessee had failed to produce books of account and other details in spite of providing several opportunities to assessee. 4.2 Being aggrieved, assessee carried matter before ld. CIT(A) who has confirmed action of AO by observing as under:- 5.3 I have perused facts of case, theassessment order and submission of appellant. In thiscase, no books of account or vouchers were produced by theassessee during assessment proceedings or appealproceedings. Therefore, I find no reason to interfere with thetrading additions made by Assessing Officer. abovegrounds are dismissed. 4.3 During course of hearing, ld. AR of assessee prayed for deletion of trading addition of Rs. 19,432/- and Rs. 16,408/- respectively as raised in Ground No. 3 and 4 of assessee s grounds of appeal.7ITA No. 634/JP/2015Smt. Smita Bharagava vs. . ITO, Ward- 6 (4), Jaipur . 4.4 ld. DR relied on orders of lower authorities. 4.5 I have heard rival contentions and perused materials available on record. It is noted that comparative chart of turnover and gross profit rate of M/s. Nath Mobiles, one of proprietorship of assessee, was at 37.18% for year under consideration in comparison to gross profit rate at 35.01% of immediately preceding year. Since gross profit rate is higher than immediately preceding year, therefore, in my considered view there was no justification for estimating gross profit in absence of any specific defects pointed out by AO. As regards other concern namely M/s. Nath Contact Lenses and Hearing Aid Centre, comparative chart shows that there was decline in gross profit rate. However, turnover of assessee is more than double in this proprietorship concern for year under consideration. Therefore, small decline of gross profit rate is explained on account of increase in turnover. Thus gross profit in absolute terms was at Rs. 3,59,065/- in comparison to gross profit at Rs. 1,60,145/- in immediately preceding year. Therefore considering entire facts and circumstances of case, I accept plea of assessee as to decline in gross profit rate of both proprietorship concerns of assessee and allow Ground No. 3 and 4 of assessee. 8ITA No. 634/JP/2015 Smt. Smita Bharagava vs. . ITO, Ward- 6 (4), Jaipur . 5.0 In result, appeal of assessee is partly allowed.Order pronounced in open court on 10 /08/2016 Sd/- (Bhagchand)Accountant MemberJaipurDated:- 10 /08/ 2016 Copy of order forwarded to: s 1. he Appellant- Smt. Smita Bhargava, Jaipur 2. Respondent- ITO, Ward- 6 (4), Jaipur 3.CIT(A). 4.CIT, 5.DR, ITAT, Jaipur 6. Guard File (ITA No. 634/JP/2015)By order,Assistant. Registrar Commissioner of Income-tax-IV, Nagpur v. Sunil Vishwambharnath Tiwari