G.K. RAMAMURTHY, MUMBAI V. JCIT RG 21(2), MUMBAI

ITA 1367/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7892 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 27-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K R DAS
• Assessee Lawyers: PARAS SAULA; K SHIVARAM
• Keywords: Capital asset; Business income; Earning of tax free income; Set aside; Capital Gains
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI N.V. VASUDEVAN, J.M. AND SHRI A.L. GEHL OT, A.M. ITA NO. 1367/MUM/2009 ASSESSMENT YEAR: 2005-06 G.K. RAMAMURTHY, APPELLANT 2701, TIVOLI CHS LTD., HIRANANDANI GARDENS, POWAI, MUMBAI 400 076. (PAN AAAPR 7219L) VS. JT. COMMISSIONER OF INCOME-TAX, RESPONDENT RANGE 21(2), MUMBAI. APPELLANT BY : MR. K. SHIVARAM & MR. PARAS SAULA RESPONDENT BY : MR. K.R. DAS ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A) XXI, MUMBAI, ON 01.01.2009 FOR THE ASSESSM ENT YEAR 2005- 06 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL: 1. THE CIT(A) VIDE HIS ORDER NO. CIT(A)XXI/JCIT-21( 2)/IT-83/07- 08 DATED 01.01.2009, ERRED IN CONFIRMING THE ORDER OF THE JCIT RANGE 21(2), MUMBAI REJECTING THE CLAIM OF APPELLAN T FOR CARRY FORWARD OF CAPITAL LOSS OF RS. 9,23,55,945/- AND AD JUSTING THE SAID LOSS AGAINST LONG TERM CAPITAL GAIN OF RS. 33, 01,57,200/- ON SALE OF SHARES ARISING AFTER 01.10.2004 ON WHICH ST T WAS PAID AND WHICH WAS EXEMPT U/S 10(38). 2. THE SAID CIT(A) XX!, ERRED IN NOT APPRECIATING T HAT LONG TERM CAPITAL LOSS WAS IN RESPECT OF REDEMPTION OF UNITS OF UTI PRIOR TO 01.10.2004 WHEN EXEMPTION U/S 10(38) WAS NOT AVAILA BLE AS THERE WAS NO PROVISION FOR PAYMENT SECURITIES TRANS ACTION TAX (STT) AT THAT TIME. FURTHER, THE SAID LONG TERM CAP ITAL LOSS ALSO ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 2 INCLUDED LOSS ON ACCOUNT OF SALE OF PROPERTIES WHIC H WAS ALLOWABLE FOR CARRY FORWARD. 2. THE ASSESSEE IS AN INDIVIDUAL. HIS SOURCE OF INC OME DURING THE PREVIOUS YEAR WAS INCOME FROM HOUSE PROPERTY, CAPIT AL GAINS AND INCOME FROM OTHER SOURCES. THE ASSESSEE FILED RETUR N OF INCOME SHOWING INCOME OF RS. 54,03,950/- AS UNDER:- I) INCOME FROM HOUSE PROPERTY RS. 7,74,205 II) SHORT TERM CAPITAL GAIN ON SALE OF BONDS OF RBI RS. 3,83,132 III) INCOME FROM OTHER SOURCES RS.45,43,025 57,00,362 DEDUCT: UNDER CHAPTER VIA 2,96,418 TOTAL INCOME RS.54,03,944 R/O TO RS. 54,03,950 =========== 2.1 IN THIS RETURN OF, THE ASSESSEE HAD SHOWN LONG TERM CAPITAL LOSS OF RS.9,23,55,945/-, WHICH THE ASSESSEE CLAIMED WAS TO BE CARRIED FORWARD TO BE SET OFF IN ACCORDANCE WITH LAW AGAINS T INCOME OF SUBSEQUENT ASSESSMENT YEAR. THE LONG TERM CAPITAL L OSS HAD ARISEN ON ACCOUNT OF SALE OF SHARES AND IMMOVABLE PROPERTY, V IZ., I) LOSS ON FORECLOSURE OF MIP 99 1 ON 1.4.2004 8, 33,18,702 II) LOSS ON FORECLOSURE OF MIP 99 1 ON 1.4.2004 11,86,041 III) LOSS ON FORECLOSURE OF MP 99 2 ON 1.8.2004 70,17,995 9,15,22,738 IV) LOSS ON SALE OF PUNE BUNGALOW ON 29.11.2004 1 4,02,753 RS. 9,29,25,491 V) DEDUCT: PROFIT ON SALE OF PLOT 5,69,546 TOTAL RS.9,23,55,945 ========= 2.2 THE ASSESSEE HAD ALSO SOLD SHARES OF SOME OF TH E COMPANIES AFTER 01.10.2004 AND MADE LONG TERM CAPITAL GAIN OF RS. 33,01,57,200/- AS UNDER:- I) PROFIT ON SALE OF SHARES OF RANBAXY LABORATORIES LTD. 33,10,40,994 II) DEDUCT: LOSS ON SALE OF SHARES OF BRITANIA INDUSTRIES LTD & SYNERGY LOGIN (13.01.05 8,83 ,794 TOTAL RS. 33,01,57,200 ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 3 2.3 AS THE ABOVE LONG TERM CAPITAL GAIN HAD ARISEN AFTER 01.10.2004 AND AS SECURITIES TRANSACTION TAX (STT) WAS PAID IN RESPECT OF SALE OF THESE SHARES THE ABOVE AMOUNT OF RS. 33,01,57,200/- WAS CLAIMED TO BE EXEMPT U/S 10(38). THE LONG TERM CAPITAL GAIN ON SALE OF SHARES, MADE AFTER 01.10.2004, ON WHICH STT IS PAID WAS COM PLETELY EXEMPT U/S 10(38) OF THE INCOME TAX ACT. THIS SECTION WAS INTRODUCED BY THE FINANCE (NO.2) ACT, 2004, W.E.F. 01.10.2004. THE SE CTION READS AS UNDER:- CHAPTER - III INCOME WHICH DO NOT FORM PART OF TOTAL INCOME INCOM ES NOT INCLUDED IN TOTAL INCOME: S. 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOW ING CLAUSES SHALL NOT BE INCLUDED (38) ANY INCOME ARISING FROM THE TRANSFER OF A LONG TERM ASSET, BEING AN EQUITY SHARE IN A COMPANY OR A UNIT OF AN EQUITY ORIENTED FUND WHERE_ (A) THE TRANSACTION OF SALE OF SUCH EQUITY. SHARE O R UNIT IS ENTERED INTO ON OR AFTER THE DATE ON WHICH CHAPTER VII OF T HE FINANCE (NO.2) ACT, 2005 COMES INTO FORCE; AND (B) SUCH TRANSACTION IS CHARGEABLE TO SECURITIES TR ANSACTION TAX UNDER THAT CHAPTER_ PROVISO. PROVISO CHAPTER VII OF THE FINANCE (NO.2) ACT, 2005 CAME I NTO FORCE WITH EFFECT FROM 01.10.2004. 2.4 THE AO WAS OF THE VIEW THAT THERE WAS A LOSS AN D ALSO AGAIN UNDER THE SAME HEAD OF INCOME I.E. LONG TERM CAPITA L GAIN, THEREFORE, THE RESULTANT LOSS OF RS. 9,23,55,945/- HAD TO BE S ET OFF AGAINST THE EXEMPTED INCOME OF RS. 33,01,57,200/-. ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 4 2.5 THE CIT(A) CONFIRMED THE ORDER OF AO OBSERVING THAT ALL THE INCOME INCLUDING EXEMPT INCOME U/S 10 HAD TO BE CLA SSIFIED UNDER ONE OF THE SIX HEADS IN TERMS OF SECTION 14 OF THE IT ACT. ONCE, THE CHARGE IS ACCEPTED, THE SCOPE OF TOTAL INCOME IS DE FINED IN SECTION 5 OF THE ACT, WHICH CLEARLY STATES THAT ALL INCOMES HAVE TO BE CONSIDERED FOR WHOLE OF THE PREVIOUS YEAR FOR THE PURPOSE OF W ORKING OUT THE TOTAL INCOME. IT HAS ALSO BEEN NOTED BY THE CIT(A) REFER RING TO THE JUDGMENT OF THE HONBLE ANDHRA PRADESH HIGH COURT I N THE CASE OF CWT VS. PACHIGOLA NARSIMHARAO [1982] 134 ITR 644 (A P) THAT THE MACHINERY PROVISIONS CANNOT BE INTERPRETED IN SUCH A WAY AS TO RESTRICT THE SCOPE OF THE CHARGING SECTION. THE HON BLE APEX COURT HAVE ALSO HELD THAT THE COURTS ARE EXPECTED TO CONS TRUE THE MACHINERY SECTIONS IN SUCH A MANNER THAT A CHARGE TO TAX IS N OT DEFEATED (ACC LTD. VS. CTO 48 STC 466 [SC]).LEVY OF TAX DEPENDS ON THE CHARGE CREATED BY THE ACT AND THE LIABILITY TO PAY TAX DEP ENDS ON COMPUTATION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. THE CIT (A) FURTHER HELD AS UNDER:- CONSIDERING THESE FACTS, THE AOS ACTION IN THE SET TING OFF OF THE LONG TERM CAPITAL GAIN AGAINST THE LONG TERM CAPITA L LOSS FOR THE ENTIRE YEAR IS JUSTIFIED. LOSS INCURRED ON SALE OF PUNE BUNGALOW ON 29.11.2004 AND THE PROFIT OBTAINED ON S ALE ON PLOT ALSO STAND AT PAR WITH OTHER LONG TERM CAPITAL GAIN , SINCE THE PROVISIONS AS IT STOOD AS ON 01.04.2004 DID NOT DIF FERENTIATE BETWEEN LONG TERM CAPITAL GAIN TRANSACTION ON WHICH SECURITY TRANSACTION TAX WAS NOT PAID. THE AOS CASE GETS FU RTHER STRENGTHENED BY THE FACT THAT THE LAW AS IT EXISTS ON 1 ST APRIL OF A YEAR IS APPLIED TO THE ASSESSMENT FOR THE ASSESSMEN T YEAR STARTING ON THAT DATE. IF ANY, AMENDMENT IS EFFECTI VE AFTER THIS DATE, IT CANNOT HAVE THE EFFECT OF DILUTION OF THE PROVISION FROM THE 1 ST APRIL ITSELF. IN THE CASE OF APPELLANT, ALL THE LO NG TERM CAPITAL GAINS HAD TO BE CLUBBED FOR WORKING OUT THE CAPITAL GAINS IN TERMS OF THE PROVISIONS AS IT EXISTED FOR THE ASSES SMENT YEAR 2005-06. INTRODUCTION OF SECTION 10(38) WILL ALLOW BENEFIT IN TERMS OF TAXABILITY OF TOTAL INCOME FROM THAT DATE BUT CA NNOT DILUTE THE FACT THAT THE LONG TERM CAPITAL LOSS DID NOT EXIST AT THE END OF THE PREVIOUS YEAR. THE AOS ACTION IN NOT ALLOWING THE CARRY FORWARD OF THE LOSS IS THEREFORE JUSTIFIED. THE GRO UND NOS. 1 & 2 IS DISMISSED. 3. THE LEARNED AR FURNISHED FACT SHEET, WHICH HAS B EEN PLACED ON RECORD. THE LEARNED AR SUBMITTED THAT THE OBSERVATI ONS OF THE CIT(A) ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 5 THAT LOSS WAS INCURRED PRIOR TO 1.10.2004, AND THE SAID LOSS HAVE BEEN INCURRED DURING THE PREVIOUS YEAR, THE ACCRU AL OF SUCH LOSS WAS SUBJECT TO MODIFICATION ON FURTHER ACCRUAL OF SIMI LAR TYPE OF INCOME TILL PREVIOUS YEAR CAME TO END. IT WAS SUBMITTED TH AT THE CIT(A) WAS NOT CORRECT IN HOLDING THAT THE ASSESSEE EARNED INC OME AFTER 1.10.2004 WHICH IS EXEMPT AND THIS FACT WILL NOT DI LUTE THE FACT THAT LONG TERM CAPITAL LOSS ACCRUED ONLY AT THE END OF T HE PREVIOUS YEAR AND THEREFORE, THE LONG TERM CAPITAL GAIN UP TO THE YEAR AND HAD TO SET OFF AGAINST THE SAID LOSS. THE LEARNED AR WHILE REFERRING PAGES 13 TO 15 BUDGET SPEECH OF MINISTER FOR FINANCE FOR 200 4-05, 268 ITR (ST.) 1; PAGES 16-18 FINANCE (NO.2) BILL, 2004, 268 ITR ( ST.) 31; NOTES TO CLAUSES, 268 ITR (ST.) 113 AT 19 TO 21 PAGES; MEMOR ANDUM EXPLAINING THE PROVISIONS IN FINANCE (NO.2) BILL, 2004, 268 IT R (ST.) 174 AT 22 TO 24 PAGES; FINANCE (NO.2) ACT, 2004, 269 IR (ST.) 1 01 AT PAGES 25 TO 27; AND CBDT CIRCULAR NO. 5 OF 2005, DATED 15 TH JULY, 2005, 276 ITR (ST.) 151 SUBMITTED THAT SECURITIES TRANSACTION TAX CAME INTO FORCE FROM 01.10.2004 AND ACCORDINGLY SECTION 10(38) WAS OPERATIONAL FROM 01.10.2004.THUS ALL TRANSACTIONS RESULTING LONG T ERM CAPITAL GAINS PRIOR TO 30.9.2004 WERE TAXABLE AND AFTER 1.10.2004 WERE EXEMPT. 3.1 THE LEARNED AR SUBMITTED THAT INCOME HAS TO BE CALCULATED AS PER THE HEAD OF INCOME. INCOME EXEMPT U/S 10 DOES NOT FORM PART OF TOTAL INCOME. HE FURTHER SUBMITTED THAT WHEN THE EX EMPT INCOME DOES NOT FORM PART OF TOTAL INCOME, SECTION 70 BEING ADJ USTMENT OF LOSSES CANNOT BE APPLIED. THE LEARNED AR SUBMITTED THAT LO SS OF EXEMPT SOURCE CANNOT BE SET OFF AND PROFIT FROM EXEMPT SOU RCE CANNOT BE ADJUSTED. HE SUBMITTED THAT SECTION 10 OF THE ACT ITSELF PROVIDES THAT INCOME SPECIFIED THEREON SHALL NOT BE INCLUDED WHIL E COMPUTING TOTAL INCOME, THEREFORE, INCOME EXEMPT FROM TAXATION U/S 10 SHALL HAVE TO BE EXCLUDED BEFORE COMPUTING THE TOTAL INCOME. THE LEARNED AR RELIED UPON JUDGMENTS IN THE CASE OF SMT. REKHA BHARAT CHH EDA V. ACIT [2009] 311 ITR (AT) 187 (MUM) (192) AND CIT VS. TRU STEES OF MISS GARGIBEN & ORS. AND [1981] 130 ITR 479 (BOM). ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 6 3.2 THE LEARNED AR SUBMITTED THAT IF THE INCOME F ROM A PARTICULAR SOURCE IS ALTOGETHER EXEMPT FROM TAX, LOSS FROM THA T SOURCE CANNOT BE SET OFF AGAINST INCOME FROM A DIFFERENT SOURCE OR I NCOME UNDER A DIFFERENT HEAD. THE LEARNED AR IN SUPPORT OF HIS CO NTENTION RELIED UPON THE FOLLOWING DECISIONS:- 1. CIT VS. S.S. THIAGARAJAN [1981] 129 ITR 115 (MAD ) (120 & 121). 2. INDORE MALWA UNITED MILLS LTD. VS. CIT [1962] 45 ITR 210 (SC). 3. RAMJILAL RAIS VS. CIT [1965] 58 ITR 181 (ALL). 4. ITO VS. TRILOK TIRATH VIDYAVATI CHUTTANI CHARITA BLE TRUST [2004] 90 ITD 568. (CHD.) 5. ACIT VS. YOKOGAWA INDIA LTD. [2007] 13 SOT 470/1 11 TTJ 548 (BANG). 6. ACIT VS. HONEYWELL TECHNOLOGY SOLUTIONS LAB. PVT . LTD., ITA NO. 344 & 345/BANG/2009 DT. 4 TH AUGUST, 2009. FOR AY 2003-04, & 2004-05. 3.3 THE LEARNED AR WHILE REFERRING A DECISION O F MUMBAI SPECIAL BENCH IN THE CASE OF JCIT VS. MONTOGOMERY E MERGING MARKETS FUND [2006] 100 ITD 217 (MUM) (SB) SUBMITTED THAT E VERY SHARE IS A SEPARATE SOURCE. 3.4 THE LEARNED AR FURTHER SUBMITTED THAT THE DECISIONS RELIED UPON BY THE CIT(A) IN THE CASE OF CWT VS. PACHIGOLA NARSIMHARAO [1982] 134 ITR 644 (AP) & ACC LTD. VS. CTO 48 STC 466 [SC] ARE DISTINGUISHABLE ON FACTS. 3.5 THE LEARNED AR SUBMITTED THAT ON ACCEPTANCE OF THE REVENUES VIEW THERE ARE ABSURD RESULTS IN INTERPRETATION. 3.6 THE LEARNED AR SUBMITTED THAT THERE IS A LONG T ERM CAPITAL LOSS AFTER 01.10.2004, WHICH IS SHOWN IN THE COMPUTATION OF TOTAL INCOME OF RS. 8,83,794/- THAT LOSS IS ADJUSTABLE. 4. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF CIT (A) AND SUBMITTED THAT CIT(A) HAS CONFIRMED THE ORD ER OF AO AFTER A ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 7 DETAILED DISCUSSION, THEREFORE, THERE IS NO INFIRMI TY IN THE ORDER OF CIT(A) AND THE SAME MAY BE UPHELD. 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE DECI SIONS CITED. SOME ADMITTED FACTS OF THE CASE ARE THAT THERE WAS LONG TERM CAPITAL GAIN OF RS. 33,01,57,200/- ON SALE OF CERTAIN SHARES BETWEE N THE PERIOD 01.10.2004 TO 31.03.2005, IN RESPECT OF WHICH, SECU RITY TRANSACTION TAX (STT) WAS PAID AND THE SAME WAS EXEMPTED U/S 10 (38) OF THE ACT. THE ASSESSEE WAS ALSO HAVING LONG TERM CAPITAL LOSS IN RESPECT OF REDEMPTION OF UNITS AND OTHER LOSS PERTAINING TO TH E PERIOD PRIOR TO 01.10.2004 AMOUNTING TO RS. 9,23,55,945/-. THE ASSE SSEE CLAIMED CARRY FORWARD OF LONG TERM CAPITAL LOSSES OF RS. 9, 23,55,945/- TO THE SUBSEQUENT YEARS. THERE IS NO DISPUTE THAT THE CAP ITAL GAIN IN QUESTION WAS EXEMPT U/S 10(38) OF THE ACT. THERE IS ALSO NO DISPUTE THAT THE CAPITAL LOSS ON SALE OF SHARES WHICH WAS C LAIMED BY THE ASSESSEE TO BE CARRIED FORWARD FOR SET OFF IN SUBSE QUENT ASSESSMENT YEAR WERE INCURRED PRIOR TO 01.10.2004 WHEN SECTION 10(38) WAS NOT IN EXISTENCE. THE CASE OF THE REVENUE IS THAT SUCH LOS S IS ADJUSTABLE AGAINST THE LONG TERM CAPITAL GAINS, WHICH WERE UND ER THE SAME HEAD THOUGH THE SAME WAS EXEMPT U/S 10(38) OF THE ACT. 5.1 WE SHALL NOW EXAMINE THE SCHEME OF THE ACT, TO FIND OUT IF INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER CHAPTER-III OF THE ACT, ENTERS THE COMPUTATION OF TOTAL INCOME. SEC. 4 OF THE ACT CREATES CHARGE OF INCOME-TAX AND IT PROVIDES THAT W HERE ANY CENTRAL ACT ENACTS THAT INCOME TAX SHALL BE CHARGED FOR ANY ASSESSMENT YEAR AT ANY RATE OR RATES, INCOME-TAX AT THAT RATE OR TH OSE RATES SHALL BE CHARGED FOR THAT YEAR IN ACCORDANCE WITH, AND SUBJE CT TO THE PROVISIONS (INCLUDING PROVISIONS FOR THE LEVY OF AD DITIONAL INCOME-TAX) OF THIS ACT IN RESPECT OF THE TOTAL INCOME OF THE P REVIOUS YEAR OF EVERY PERSON. THE CHARGE OF TAX IS THUS ON TOTAL INCOME. SEC. 2 (45) DEFINES TOTAL INCOME TO MEAN TOTAL AMOUNT OF INCOME REFERRE D TO IN SEC.5, ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 8 COMPUTED IN THE MANNER LAID DOWN IN THIS ACT. CHAPT ER-II OF THE ACT, FROM SECTION 4 TO 9 DEAL WITH BASIS OF CHARGE. CHAP TER-III OF THE ACT, DEALS WITH INCOME WHICH DO NOT FORM PART OF TOTAL I NCOME AND ARE CONTAINED IN SECT. 10 TO 13-B OF THE ACT. CHAPTER I V DEALS WITH THE COMPUTATION OF TOTAL INCOME. FIRSTLY INCOME IS CATE GORIZED UNDER VARIOUS HEADS OF INCOME. THIS IS LAID DOWN IN SECTI ON 14 OF THE ACT, WHICH LAYS DOWN THAT SAVE AS OTHERWISE PROVIDED BY THIS ACT, ALL INCOME SHALL, FOR THE PURPOSES OF CHARGE OF INCOME- TAX AND COMPUTATION OF TOTAL INCOME, BE CLASSIFIED UNDER TH E FOLLOWING HEADS OF INCOME SALARIES, INCOME FROM HOUSE PROPERTY, P ROFITS AND GAINS OF BUSINESS OR PROFESSION, CAPITAL GAINS, INCOME FROM OTHER SOURCES. CHAPTER V THEN BRINGS INCOME OF OTHER PERSONS, WHIC H ARE TO BE INCLUDED IN THE TOTAL INCOME OF AN ASSESSEE AND THI S IS CONTAINED IN SECTION 60 TO 65 OF THE ACT. CHAPTER-VI (CONTAINING SEC. 66 TO 80) THEN LAYS DOWN PROVISIONS REGARDING AGGREGATION OF INCOM E AND SET OFF OR CARRY FORWARD OF LOSS. SECTION 60 READS AS UNDER:- TOTAL INCOME IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE, THERE SHALL BE INCLUDED ALL INCOME ON WHICH NO INCO ME-TAX IS PAYABLE UNDER CHAPTER VII. 5.2 THE PROVISIONS OF SECTION 66 ARE NOT APPLICABLE TO INCOMES WHICH ARE ABSOLUTELY EXEMPT FROM TAX AS PER SECTION 10, S ECTION 11 ETC., FALLING UNDER CHAPTER III. THIS POSITION IS MADE CL EAR BY S. 66 ITSELF AS IT SPEAKS ONLY OF INCOMES ON WHICH TAX IS NOT PAYAB LE AND SIMILAR WORDS ARE USED IN CHAPTER VII ONLY THUS LEAVING OUT BY IMPLICATION INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME AT A LL AS PER CHAPTER III FROM THE SCOPE OF S. 66 IN CIT VS. N.M. RAIJI [ 1949] 17 ITR 180 (BOM), THE QUESTION FOR CONSIDERATION BEFORE THE HO NBLE BOMBAY HIGH COURT WAS AS TO WHETHER SHARE INCOME OF A PARTNER W HICH DOES NOT FORM PART OF THE TOTAL INCOME HAS TO BE ADDED TO TH E TOTAL INCOME IN ORDER TO DETERMINE THE RATE AT WHICH INCOME TAX WAS PAYABLE BY THE PARTNER. SEC. 16 OF THE INCOME TAX ACT, 1922 CORRES PONDING TO SEC. 66 OF THE INCOME TAX ACT, 1961 WAS SUBJECT MATTER UNDE R CONSIDERATION IN THE AFORESAID DECISION. THE HONBLE BOMBAY HIGH COURT HELD AS FOLLOWS:- ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 9 2. NOW THE SCHEME OF THE INDIAN IT ACT IS THAT INCO ME, PROFITS AND GAINS OF AN ASSESSEE ARE LIABLE TO TAX SUBJECT TO CERTAIN EXEMPTIONS AND EXCEPTIONS. ALTHOUGH CERTAIN SUMS MA Y BE EXEMPTED FROM TAXATION, STILL THEY MAY FORM PART OF THE TOTAL INCOME OF AN ASSESSEE IN ORDER TO DETERMINE THE RAT E AT WHICH INCOME-TAX IS PAYABLE. THEREFORE IT FOLLOWS THAT TH E TOTAL INCOME OF AN ASSESSEE IS NOT NECESSARILY WHOLLY SUBJECT TO TAX. PORTIONS OF IT MAY BE EXEMPT FROM TAXATION AND YET MAY BE CO MPUTED FOR THE PURPOSE OF DETERMINING THE RATE AT WHICH TAX IS PAYABLE .TOTAL INCOME IS DEFINED IN S. 2(15) OF THE ACT, AND IT MEANS TOTAL AMOUNT OF INCOME, PROFITS AND GAINS COM PUTED IN THE MANNER LAID DOWN IN THIS ACT. THEREFORE, IT WOULD BE ERRONEOUS TO SUGGEST THAT TOTAL INCOME IS TO BE DET ERMINED ONLY IN THE LIGHT OF S. 4, SUB-SECTION (3), OF THE ACT. HOW TOTAL INCOME IS TO BE COMPUTED AND DETERMINED DEPEN DS UPON THE VARIOUS PROVISIONS CONTAINED IN THE ACT AS A WHOLE. THEN WE MIGHT LOOK AT VARIOUS SECTIONS WHICH PROVIDE FOR EXEMPTIONS FROM THE PAYMENT OF TAX. THE RE IS S. 7 WHICH CONTAINS VARIOUS PROVISOS WHICH COVER SUMS NOT LIABLE TO TAX. SIMILARLY S. 8. SECTION 14 ALSO CONT AINS EXEMPTIONS WITH REGARD TO CERTAIN SUMS ON WHICH NO TAX IS PAYABLE, AND S. 15 CONTAINS EXEMPTIONS IN CASES OF LIFE INSURANCE. IT WILL BE NOTICED THAT THE LANGUAGE USE D IN ALL THESE SECTIONS, TO WHICH I HAVE REFERRED IS SIMILAR , IF NOT IDENTICAL, WITH THE LANGUAGE USED IN S. 25(4), VIZ. , THAT THE TAX IS NOT PAYABLE ON THESE DIFFERENT SUMS. NOW, IF MR. JOSHIS CONTENTION WAS SOUND, THEN WITH REGARD TO T HESE VARIOUS EXEMPTIONS WHICH I HAVE ENUMERATED, ALTHOUG H TAX IS NOT PAYABLE, THEY SHOULD ALL BE INCLUDED IN THE TOTAL INCOME FOR THE PURPOSE OF DETERMINING THE RATE PAYA BLE IN RESPECT OF INCOME-TAX. NOW, THE SHORT AND CONCLUSIV E ANSWER TO THAT CONTENTION IS S. 16 OF THE INDIAN IT ACT. IT IS THAT SECTION WHICH IN TERMS INCLUDES IN THE TOTAL I NCOME OF AN ASSESSEE ONLY CERTAIN SUMS WHICH ARE EXEMPTED FR OM THE PAYMENT OF TAX. THEREFORE, BY IMPLICATION, WHER E THE SUMS ARE NOT INCLUDED IN THE TOTAL INCOME BY S. 16, THOSE SUMS ARE NOT ONLY EXEMPTED FROM THE PAYMENT OF TAX, BUT THEY ARE ALSO EXCLUDED FROM THE TOTAL INCOME. NOW, WHEN WE LOOK AT S. 16, IT DOES NOT INCLUDE THE SUM COVER ED BY S. 25(4) AS A SUM WHICH IS TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. THE SCHEME, THEREFORE, OF THE IT A CT IS CLEAR AND IS VERY DIFFERENT FROM WHAT MR. JOSHI SUG GESTS IT IS. THE SCHEME IS THAT WHEREVER ONE FINDS AN EXEMPT ION OR EXCLUSION FROM PAYMENT OF TAX, THE EXEMPTION OR EX CLUSION ALSO OPERATES FOR THE PURPOSE OF COMPUTING THE TOTA L INCOME. NOT ONLY IS THE SUM NOT LIABLE TO TAX, BUT IT IS AL SO NOT TO FORM PART OF THE TOTAL INCOME FOR THE PURPOSE OF DE TERMINING THE RATE. WHEN THE LEGISLATURE INTENDS THAT CERTAIN SUMS, ALTHOUGH NOT LIABLE TO TAX, SHOULD BE INCLUDED IN T HE TOTAL ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 10 INCOME, IT EXPRESSLY SO PROVIDES, AS IT IS DONE IN S. 16, AND THEREFORE PRIMA FACIE WHEN WE COME TO S. 25(4) AND WHEN WE FIND THAT THE ASSESSEE IS NOT LIABLE TO PAY TAX ON THE SUM RECEIVED BY HIM AS HIS SHARE IF THE PARTNERSHIP , THAT SUM CANNOT AND DOES NOT FORM PART OF HIS TOTAL INCO ME. MR. JOSHI HAS NOT SUCCEEDED IN POINTING OUT TO US ANY PROVISIONS IN THE ACT WHEREBY THIS PARTICULAR SUM C OVERED BY S. 25(4) HAS BEEN MADE A PART OF THE TOTAL INCOM E OF THE ASSESSEE. THEREFORE, IN MY OPINION, THE SHARE OF TH E PROFIT OF THE ASSESSEE IN THE FIRM S.B. BILLIMORIA & CO., IN THE ACCOUNTING YEAR 1943 CANNOT BE INCLUDED IN THE TOTA L INCOME OF THE ASSESSEE FOR ASCERTAINING THE RATE OF INCOME- TAX. 5.3 IT IS THUS CLEAR FROM THE SCHEME OF THE ACT, TH AT INCOMES WHICH DO NOT FORM PART OF THE TOTAL INCOME AS LAID DOWN I N CHAPTER-III OF THE ACT, DO NOT ENTER THE COMPUTATION OF TOTAL INCOME A T ALL. 5.4 NOW WE SHALL EXAMINE THE PROVISIONS WITH REGARD TO CLAIM OF CARRY FORWARD AND SET OFF. THE ASSESSEE IN THE PRES ENT CASE HAS CLAIMED CARRY FORWARD OF LONG TERM CAPITAL LOSS. SU CH CLAIM HAS TO BE TESTED IN TERMS OF SEC. 74 OF THE ACT, WHICH CONFER S SUCH RIGHT ON THE ASSESSEE. THE RELEVANT PORTION OF SEC. 74 OF THE AC T, READS AS FOLLOWS: LOSSES UNDER THE HEAD CAPITAL GAINS-(1) WHERE IN RESPECT OF ANY ASSESSMENT YEAR, THE NET RESULT OF THE COMPUTATION UNDER THE HEAD CAPITAL GAINS IS A LOSS TO THE ASSESSEE, THE WHOLE LOSS SHALL, SUBJECT TO THE OTHER PROVISIONS OF THIS CHAP TER, BE CARRIED FORWARD TO THE FOLLOWING ASSESSMENT YEAR, THE SECTION SAYS SUBJECT TO OTHER PROVISIONS OF TH IS CHAPTER I.E., CHAPTER VI CONTAINING SEC.66 TO 80. THE OTHER PROVI SIONS WHICH WILL BE RELEVANT IN THIS REGARD ARE SEC.70(3) SECTION 70: SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME. ..(3) WHERE THE RESULT OF THE COMPUTATION MADE FOR ANY ASSESSMENT YEAR UNDER SECTIONS 48 TO 55 IN RESPECT OF ANY CAPITAL ASSET {OTHER THAN A SHORT-TERM CAPITAL ASSET) IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SU CH LOSS SET OFF AGAINST THE INCOME, IF ANY, AS ARRIVED AT UNDER A S IMILAR COMPUTATION MADE FOR THE ASSESSMENT YEAR IN RESPECT OF ANY OTHER CAPITAL ASSET NOT BEING A SHORT-TERM CAPITAL ASSET 5.5 THE CASE OF THE REVENUE IS THAT THE LONG TERM C APITAL GAIN WHICH WAS EXEMPT U/S 10(38) OF THE ACT, IS INCOME ARRIVED AT UNDER SIMILAR ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 11 COMPUTATION MADE AS THE LONG TERM CAPITAL LOSS WAS ARRIVED AT AND THEREFORE THE LONG TERM CAPITAL LOSS HAS TO BE SET OFF AGAINST LONG TERM CAPITAL GAIN. IN OTHER WORDS THE CASE OF THE REVENU E IS THAT THE LONG TERM CAPITAL GAIN IS INCOME NOTWITHSTANDING THE FAC T THAT IT IS EXEMPT U/S (38) OF THE ACT. THIS REASONING IN OUR VIEW IS FALLACIOUS. WE HAVE ALREADY POINTED OUT THAT INCOME WHICH DO NOT FORM P ART OF THE TOTAL INCOME DO NOT ENTER THE COMPUTATION OF TOTAL INCOME AT ALL I.E., UNDER ANY OF THE HEADS OF INCOME MENTIONED IN SEC. 14 OF THE ACT. THEREFORE THE QUESTION OF AGGREGATING THEM UNDER CHAPTER VI A T ALL DOES NOT ARISE. THEREFORE THE QUESTION OF SET OFF OF THE SAM E UNDER SEC. 70(3) OF THE ACT ALSO DOES NOT ARISE FOR CONSIDERATION. THER EFORE THE RIGHT OF CARRY FORWARD U/S 74(1) OF THE ACT IN RESPECT OF TH E LONG TERM CAPITAL LOSS SUFFERED BY THE ASSESSEE IS NOT HIT BY THE PRO VISIONS OF SEC. 70(3) OF THE ACT. 5.6 IN RAMJILAL RAIS VS. CIT, 58 ITR 181 (ALL.) AND IDENTICAL STAND WAS TAKEN BY THE ASSESSEE. THE FACTS IN THE AFORESA ID CASE WERE THE ASSESSEE HUF SUFFERED LOSS IN BUSINESS DURING THE B ROKEN PERIOD WHEN THE HUF BUSINESS ON PARTITION PASSED HANDS TO A PARTNERSHIP BUSINESS. THE INCOME FOR THE BROKEN PERIOD WAS INCO ME WHICH DID NOT FROM PART OF THE TOTAL INCOME. THE ASSESSEE CLAIMED THAT IT WAS ENTITLED TO SET OFF THE LOSS FROM THE BUSINESS AGAI NST THE INCOME UNDER OTHER HEADS. THIS CLAIM WAS REJECTED BY THE ITO, AN D HE DID NOT SET OFF THE LOSS AGAINST THE INCOME UNDER OTHER HEADS. THE AAC, HOWEVER, ON APPEAL, HELD IN FAVOUR OF THE ASSESSE BUT THE TRIBU NAL REVERSED THE FINDING OF THE AAC AND RESTORED THAT OF THE ITO. TH E QUESTION BEFORE THE COURT WAS AS TO WHETHER THE LOSS SUFFERED IN TH E BUSINESS DURING THE BROKEN PERIOD, CAN BE SET OFF AGAINST INCOME UN DER OTHER HEADS. THE HONBLE ALLAHABAD HIGH COURT HELD AS FOLLOWS: .WE ARE OF OPINION THAT THE SET OFF CANNOT BE AL LOWED. 3. THE INDIAN IT ACT, 1922, EXPRESSLY EXEMPTS CERTA IN ITEMS OF CLASSES OF INCOME FROM ITS OPERATION. SUCH INCOME I S NOT LIABLE TO BE CONSIDERED FOR THE PURPOSES OF THE ACT AT ALL, U NLESS SOME OTHER PROVISION OF THE ACT BRINGS IT WITHIN ITS SCO PE FOR SOME SPECIFIC PURPOSE. THE ACT CONTAINED FROM TIME TO TI ME VARIOUS ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 12 PROVISIONS WHICH PROVIDED FOR EXEMPTION. THERE WERE THE PROVISOS TO S. 7 BEFORE IT WAS AMENDED IN 1955. THERE ARE TH E PROVISOS TO S. 8. SEC. 14 SETS OUT A NUMBER OF EXEMPTIONS OF GE NERAL NATURE. SEC.15, 15A, 15B AND 15C SIMILARLY PROVIDE FOR EXEM PTION. ALTHOUGH THE LANGUAGE GENERALLY EMPLOYED IS THAT TH E THE TAX SHALL NOT BE PAYABLE IN RESPECT OF SUCH SUMS, THE ACTUAL LANGUAGE EMPLOYED IS IMMATERIAL. WHAT IS TO BE ASCE RTAINED IS WHETHER THE LANGUAGE CLEARLY INTENDS AN EXEMPTION F ROM THE OPERATION OF THE ACT. NOW, THE SEVERAL SUMS COVERED BY THESE PROVISIONS WOULD LIE OUTSIDE THE SCOPE OF THE ACT A LTOGETHER, WERE IT NOT THAT CERTAIN PROVISIONS OF THE ACT EXPRESSLY INCLUDE THEM WITHIN ITS SCOPE FOR A CERTAIN PURPOSE. ONE SUCH PR OVISION IS S. 16(1)(A) WHICH DECLARES THAT IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE ANY SUMS EXEMPTED UNDER SOME OF THE PROVIS IONS MENTIONED ABOVE SHALL BE INCLUDED. THESE SUMS ARE I NCLUDED IN THE TOTAL INCOME FOR THE PURPOSE OF DETERMINING THE TRUE RATE APPLICABLE TO THE RATE APPLICABLE TO THE TAXABLE IN COME OF THE ASSESSEE. THE SUM EXEMPTED UNDER S. 25(4) IS NOT RE FERRED TO IN S. 16(1) AND IS NOT LIABLE TO BE INCLUDED IN THE TO TAL INCOME OF THE ASSESSEE. IT IS EXEMPT ALTOGETHER FROM THE OPERATIO N OF THE ACT. THE BOMBAY HIGH COURT TOOK THIS VIEW IN CIT VS. N.M . RAIJI (1949) 17 ITR 180 (BOM), AND WE ARE IN RESPECTFUL AGREEMEN T WITH THAT DECISION. 4. THE ASSESSEE POINTS OUT THAT BEFORE ITS AMENDMEN T BY THE IT(AMENDMENT) ACT, 1939, THE DEFINITION OF TOTAL I NCOME WAS: TOTAL INCOME MEANS TOTAL AMOUNT OF INCOME, PROFITS AND GAINS FROM ALL SOURCES TO WHICH THIS ACT APPLIES CO MPUTED IN THE MANNER LAID DOWN IN S. 16. AS A RESULT OF THE AMENDMENT ACT OF 1939, THE PRESE NT DEFINITION OF TOTAL INCOME IS: TOTAL AMOUNT OF INCOME, PROFITS AND GAINS REFERRED TO IN SUB-S. (1) OF S. 4 COMPUTED IN THE MANNER LAID DOWN IN THIS ACT. 5. IT IS CONTENDED THAT THE AMENDMENT EXTENDED THE SCOPE OF THE DEFINITION OF TOTAL INCOME SO THAT IT COVE RED NOT ONLY THE SUMS SPECIFICALLY REFERRED TO IN S. 16, BUT AL SO THOSE SUMS MENTIONED OTHER PROVISIONS OF THE ACT IN RESPE CT OF WHICH IT WAS DECLARED THAT NO TAX WAS PAYABLE. IT A PPEARS TO US THAT THE CONTENTION IS STATED RATHER WIDELY. IT IS NOT EVERY SUM DECLARED BY THE ACT TO BE EXEMPT WHICH IS LIABLE TO E INCLUDED IN THE TOTAL INCOME. IT IS ONLY THOSE SUMS WHICH THE ACT SPECIFICALLY REQUIRES TO BE SO INCLUD ED. TO OUR MIND, THE AMENDMENT OF THE DEFINITION OF TOTAL INC OME DOES NOT ELIMINATE THE DISTINCTION BETWEEN THE TWO CATEG ORIES OF EXEMPTED SUMS, THOSE WHICH ARE EXEMPT FROM CHARGE A S WELL AS FROM INCLUSION IN THE TOTAL INCOME AND THOS E WHICH ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 13 ARE EXEMPT FROM CHARGE BUT ARE LIABLE LE TO BE INC LUDED IN THE TOTAL INCOME. NOTHING HAS BEEN SHOWN TO US TO T AKE US TO THE CONCLUSION CONTENDED FOR BY THE ASSESSEE. 6. IF, AS IT SEEMS TO US, THE INCOME OF THE BROKEN PERIOD IS EXEMPT ALTOGETHER FROM THE OPERATION OF THE IT ACT, THEN THERE IS NO BASIS FOR APPLYING THE PROVISIONS OF S. 24(1) TO THAT SUM. IF THE ASSESSEE HAS EARNED A PROFIT DURIN G THE BROKEN PERIOD, IT IS NOT LIABLE TO BE CONSIDERED FO R ANY PURPOSE IN RESPECT OF THE ASSESSMENT YEAR TO WHICH THE BROKEN PERIOD RELATES. 5.7. ONE MORE ANGLE OF EXAMINATION OF MA TTER IS TO SEE THE PURPOSE AND INTENTION OF INSERTION OF CLAUSE (38) O F THE SECTION 10 OF THE ACT OF THE LEGISLATURE. BEFORE INSERTION OF CLA USE (38) OF THE SECTION 10 OF THE ACT, THE EXISTING PROVISIONS OF THE INCOM E-TAX ACT, PROFITS AND GAINS ARISING TO AN INVESTOR FROM THE TRANSFER OF SECURITIES WERE CHARGED TO TAX EITHER AS LONG TERM CAPITAL GAINS OR SHORT TERM CAPITAL GAINS DEPENDING ON THE PERIOD OF HOLDING OF THE SAI D SECURITIES. SHORT- TERM CAPITAL GAINS ARISING FROM TRANSFER OF SECURIT IES ARE TAXED AT THE APPLICABLE RATES. LONG TERM CAPITAL GAINS ARE TAXED AT 20%, AFTER ADJUSTING FOR INFLATION BY INDEXING THE COST OF ACQ UISITION. FOR LISTED SECURITIES, THE TAXPAYER HAS AN OPTION TO PAY TAX O N LONG-TERM CAPITAL GAINS AT 10% BUT WITHOUT INDEXATION. FOR FOREIGN IN STITUTIONAL INVESTORS (FIIS), THE LONG TERM CAPITAL GAINS AND S HORT TERM CAPITAL GAINS ARE TAXED AT THE RATE OF 10% (WITHOUT INDEXAT ION) AND 30% RESPECTIVELY. IN CASE OF A TRADER IN SECURITIES, HO WEVER, THE GAINS ARE TAXED AS ANY OTHER NORMAL BUSINESS INCOME. WITH A V IEW TO SIMPLIFY THE TAX REGIME ON SECURITIES TRANSACTIONS; IT WAS P ROPOSED TO LEVY A TAX AT THE RATE OF 0.15 PER CENT ON THE VALUE OF AL L THE TRANSACTIONS OF PURCHASE OF SECURITIES THAT TAKE PLACE IN A RECOGNI ZED STOCK EXCHANGE IN INDIA. THIS TAX WAS TO BE COLLECTED BY THE STOCK EXCHANGE FROM THE PURCHASER OF SUCH SECURITIES AND PAID TO THE EXCHEQ UER. THE ABOVE PROVISIONS RELATING TO THE PROPOSED TAX WERE CONTAI NED IN CHAPTER VII OF THE FINANCE (NO.2) BILL, 2004, AND TOOK EFFECT F ROM 01.10.04 FURTHER, IT WAS PROPOSED TO INSERT CLAUSE (38) IN S ECTION 10 OF THE INCOME TAX ACT, SO AS TO PROVIDE EXEMPTION FROM LON G TERM CAPITAL ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 14 GAINS ARISING OUT OF SECURITIES SOLD ON THE STOCK E XCHANGE. THUS SECTION 10(38) HAS BEEN INSERTED WITH A PARTICULAR OBJECT TO GRANT EXEMPTION TO SUCH INCOME AS TAX HAS ALREADY BEEN LE VIED ON SOME DIFFERENT FOOTINGS. IF WE ACCEPT THE CONTENTION OF THE REVENUE TO ADJUST LONG TERM CAPITAL LOSS AGAINST EXEMPT INCOME (LONG TERM CAPITAL GAIN) THAT WILL BE CONTRARY TO LAW AND CONTRARY TO THE IN TENTION, OBJECT AND PURPOSE OF THE LEGISLATURE IN INTRODUCING CLAUSE (3 8) TO SECTION 10 OF THE ACT. FURTHER, ON ACCEPTANCE OF REVENUES VIEW O N THE ISSUE, THERE IS ABSURD OUTCOME OF INTERPRETATION IF THE FACTS AR E REVERSED, THEN, LONG TERM CAPITAL LOSS FROM TAXABLE ASSETS WILL HAV E TO BE ADJUSTED AGAINST THE LONG TERM CAPITAL GAINS EXEMPT U/S 10(3 8) OF THE ACT. SUPPOSE IN THE CASE ON HAND IF THERE IS TAXABLE LON G TERM CAPITAL GAIN BEFORE 01.10.2004 OF RS. 33,01,57,200/- AND LONG TE RM CAPITAL LOSS OF RS. 9,23,55,945/-, WHICH MAY BE EXEMPT U/S 10(38) A FTER 01.010.2004 THEN THE LOSS FROM EXEMPT SOURCE WOULD BE SET OFF A GAINST TAXABLE GAIN, SUCH SET OFF IS CONTRARY TO LAW. 5.8. IN THE LIGHT OF THE ABOVE DISCUSSION, WE ARE NOT IN AGREEMENT WITH THE VIEW OF THE REVENUE THAT LONG TERM CAPITAL LOSS IS TO SET OFF AGAINST EXEMPT INCOME (LONG TERM CAPITAL GAINS) AFT ER 1.10.2004. WE, THEREFORE, SET ASIDE THE ORDERS OF THE REVENUE AUTH ORITIES AND ALLOW THE CLAIM OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED ON THIS 9 TH DAY OF FEBRUARY, 2010 SD/- SD/- (N.V. VASUDEVAN) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: 9 TH FEBRUARY, 2010 ITA NO. 1367/MUM/09 G.K. RAMAMURTHY 15 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, G BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 20.01.2010 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 21.01.2010/ 9/2/2010 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER