Akshar Chem (India) Ltd, Ahmedabad V. The CIT,A'bad-I, Ahmedabad

ITA 1071/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57054 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Speculation loss
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 1071/ AHD/2011 (ASSESSMENT YEAR 2006-07) M/S. AKSHAR CHEM (INDIA) LTD., C/O SKYJET AVIATION PVT. LTD., 36, VAKIL CHAMBERS, NR. NEHRU BRIDGE CORNER, KHANPUR ROAD, LAL DARWAJA, AHMEDABAD VS. CIT- I, AHMEDABAD PAN/GIR NO. : AABCA2805M (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI SUNIL H. TALATI, AR RESPONDENT BY: SHRI ALOK JOHRI, CIT DR DATE OF HEARING: 16.12.2011 DATE OF PRONOUNCEMENT: 31.01.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT I, AHMEDABAD DATED 28.03.2011 PASSED BY HIM U/S 263 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2006-07. THE GRO UNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED C.I.T. HAS ERRED IN PASSING O RDER U/S. 263 WITHOUT JURISDICTION AND APPROPRIATE POWERS AVAILAB LE UNDER THE ACT. IT IS SUBMITTED THAT THE ORDER PASSED U/S. 263 IS BAD IN LAW, VOID AB INITIO AND THE SAME BE DELETED. 2. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBM ITTED THAT THE ORDER PASSED U/S. 263 OF THE I.T. ACT IS NOT CORRECT ON F ACTS AND IN LAW INASMUCH AS THE ORIGINAL ORDER PASSED U/S. 143(3) W AS NEITHER I.T.A.NO.1071 /AHD/2011 2 PREJUDICED TO THE INTEREST OF REVENUE NOR IT WAS ER RONEOUS. IT IS SUBMITTED THAT THE FINDING GIVEN BY THE LEARNED C.I T, IS NOT CORRECT ON THE FACTS AND FAR FROM TRUTH. IT BE SO HELD NOW. 3. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBM ITTED THAT THE LEARNED C.I.T. HAS ERRED IN HOLDING AND DIRECTING T HAT THE ASSESSMENT ORDER PASSED U/S. 143(3) DATED 16-12-200 8 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST AND HAS E RRED BY SETTING ASIDE SUCH ORDER WITH A DIRECTION THAT THE ASSESSIN G OFFICER SHOULD VERIFY WHETHER THE ASSESSEE IS ELIGIBLE TO AVAIL SE T OFF OF BROUGHT FORWARD SPECULATION LOSS PERTAINING TO ASST. YEAR 1 999-2000 TO 2001-02 FROM THE PROFIT EARNED IN THIS YEAR, I.E. I N A.Y. 2006-07. IT IS SUBMITTED THAT THE ACT AND LAW IS WELL-SETTLED, CARRY FORWARD LOSS IS AVAILABLE FOR A PERIOD OF 8 YEARS, WHICH WA S THOROUGHLY EXAMINED BY THE ASSESSING OFFICER AFTER APPLYING HI S MIND AND RELEVANT PROVISIONS OF LAW AND JUDGEMENTS- IN VIEW OF THIS, THE ORDER OF ASSESSING OFFICER IS NEITHER PREJUDICIAL T O THE INTEREST OF REVENUE NOR ERRONEOUS. IT IS SUBMITTED THAT THE FIN DING AND DIRECTION OF C.I.T. IS BAD IN LAW AND CONTRARY TO T HE ACT AND PROVISIONS OF LAW AND THE ORDER OF C.I.T. BE SET AS IDE AND QUASHED. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THA T ACCORDING TO THE PROVISIONS OF SEC. 73(4), LOSS DETERMINED FOR ASST. YEAR 1999-2000 TO 2001-02 HAD BEEN RIGHTLY ADJUSTED AGAINST THE $P ECULATION-4OSS- OF RS.10,74,655/- OF ASST. YEAR 2006-07 INASMUCH AS THE AMENDED PROVISION REFERRED TO BY LEARNED C.I.T. CAME IN FOR CE BY FINANCE ACT, 2005 WITH EFFECT FROM 1-4-2006, WHICH IS APPLI CABLE PROSPECTIVELY FOR SPECULATION LOSS SUFFERED FOR AND FROM ASST. YEAR 2006-07 AND NOT FOR THE SPECULATION LOSS DETERMINED PRIOR TO F.Y. 2005-06, I.E. ASST. YEAR 2006-07. IT IS SUBMITTED T HAT THE LAW BEING CLEAR, THERE IS NO QUESTION OF ANY AMBIGUITY OR INT ERPRETATION AND THE ASSESSING OFFICER HAVING CORRECTLY GIVEN THE SE T OFF, THE ORDER PASSED BY THE LEARNED C.I.T. U/S. 263 SETTING ASIDE SUCH ORDER IS NOT JUSTIFIED ON FACTS AND ON LAW, THE SAME BE CANCELLE D AND SET ASIDE. THE ORDER PASSED BY THE LEARNED C.I.T. IS BAD IN LA W AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED TH AT THE SAME BE HELD SO NOW. 2. IT IS SUBMITTED BY THE LD. A.R. THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION RENDERED I N THE CASE OF MR. VIRENDRA KR. JAIN IN I.T.A.NO. 109/MUM/10 DATED 31. 05.2010. HE I.T.A.NO.1071 /AHD/2011 3 SUBMITTED A COPY OF THIS TRIBUNAL DECISION WHICH IS AVAILABLE ON PAGE 22- 28 OF THE PAPER BOOK. LD. D.R. SUPPORTED THE ORDER OF CIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT THE DISPUTE IN THE PRESENT CASE IS AS TO WHETH ER THE ASSESSEE IS ELIGIBLE TO AVAIL SET OFF OF BROUGHT FORWARD SPECULATION LOS S PERTAINING TO ASSESSMENT YEAR 1999-2000 TO ASSESSMENT YEAR 2001-0 2 AGAINST THE PROFITS EARNED IN THE PRESENT YEAR IN VIEW OF THE A MENDED PROVISIONS OF SUB-SECTION (4) TO SECTION 73 OF THE INCOME TAX ACT , 1961. IN THE CASE OF MR. V K JAIN (SUPRA), THERE WAS THE VERY ISSUE BEFO RE THE TRIBUNAL AS TO WHETHER THE ASSESSEE HAS VESTED RIGHT OF CARRY FORW ARD OF SPECULATION LOSS FOR A PERIOD OF EIGHT YEARS FOLLOWING THE ASSESSMEN T YEAR IN WHICH THE LOSS WAS INCURRED ACCORDING TO SECTION 73(4) AS IT WAS T HERE BEFORE BEING AMENDED BY THE FINANCE ACT 2005 W.E.F. 01.04.2006. IN THAT CASE, IT WAS HELD BY THE TRIBUNAL THAT THE ASSESSEE HAD ACQUIRED VESTED RIGHT TO HAVE SPECULATION LOSS COMPUTED FOR THE ASSESSMENT YEAR 2 001-02 CARRIED FORWARDED TO THE SUBSEQUENT EIGHT YEARS AS PER SECT ION 73(4) AS IT STOOD BEFORE THE AMENDMENT MADE BY THE FINANCE ACT 2005, WHICH RIGHT IS A VESTED RIGHT CANNOT BE DOUBTED AFTER THE JUDGMENT O F HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS SHAH SADIQ & SONS AS REPORTED IN 166 ITR 102 (S.C.). LD. D.R. COULD NOT POINT OUT AS TO HOW THIS TRIBUNAL DECISION IS NOT APPLICABLE IN THE PRESENT CASE AND HENCE, BY RESPECTFULLY FOLLOWING THIS TRIBUNAL DECISION, WE HOLD THAT THE ACTION OF THE CIT U/S 263 IS NOT JUSTIFIED BECAUSE THE VIEW TAKEN BY THE A.O. IS A P OSSIBLE VIEW IN THE LIGHT OF THIS TRIBUNAL DECISION CITED BY THE LD. A.R. AND , THEREFORE, AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF MALABAR INDUSTRIAL CORPORATION LTD. AS REPORTED IN 243 ITR 83, THE ASSESSMENT I.T.A.NO.1071 /AHD/2011 4 ORDER CANNOT BE SAID TO BE ERRONEOUS WHEN THE VIEW TAKEN BY THE A.O. IS A POSSIBLE VIEW. WE, THEREFORE, HOLD THAT THE ORDER OF LD. CIT U/S 263 IS QUASHED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 5. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 24/1 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/1.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.30/1 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31/1 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31/1 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/01/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .