ITO, Jaipur V. SMT. MEENA BAID, Jaipur

ITA 534/JPR/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82737 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 31-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRA
• Assessee Lawyers: NARESH SHARMA
• Keywords: Difference of opinion
• Section: 43(5)

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 534/JP/2011 ASSTT. YEAR- 2005-06 PAN NO. AAWPB 7457 Q THE INCOME TAX OFFICER, SMT. MEENA BAID, WARD 6(1), JAIPUR. VRS. A-27, SHANTI PATH TILAK NAGAR, JAIPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY :- SHRI SUBHASH CHANDRA. ASSESSEE BY :- SHRI NARESH SHARMA. DATE OF HEARING : 13/08/2014 DATE OF PRONOUNCEMENT : 14/08/2014 O R D E R PER: T.R. MEENA, A.M. SINCE THERE WAS A DIFFERENCE OF OPINION BETWEEN THE LEARNED MEMBERS, CONSTITUTING A DIVISION BENCH OF I.T.A.T., JAIPUR AN D THE HONBLE PRESIDENT, I.T.A.T. NOMINATED SHRI R.S. SYAL, HONBLE ACCOUNTANT MEMBER, DELHI BENCHES OF I.T.A.T. AS THIRD MEMBER. THE HONBLE THIRD MEMBER VI DE ORDER DATED 22 ND JULY, 2014 CONCURRED WITH THE FINDINGS OF THE HONBL E JUDICIAL MEMBER AND HELD AS UNDER:- I FIND THIS CONTENTION TO BE BEREFT OF ANY FORCE BECAUSE THE ASSESSEE ADMITTEDLY RECEIVED THE DELIVERY OF SUCH SHARES IN DECEMBER, 2005. THE MERE 2 FACT THAT THE DELIVERY WAS NOT RECEIVED UP TO 31/3/2 005, BEING THE YEAR ENDING RELEVANT TO THE A.Y. UNDER CONSIDERATION, WOULD NOT MAKE A NON-SPECULATIVE TRANSACTION TO BE A SPECULATIVE ONE. IF THE CONTEN TION OF THE LD. DR IS ACCEPTED THAT THE INSTANT TRANSACTIONS BE HELD AS SPECULATIV E BECAUSE THERE WAS NO DELIVERY TILL THE YEAR END, THEN EVERY PURCHASE TRA NSACTION WILL BE SPECULATIVE TILL THE DELIVERY IS RECEIVED AND THEN IT WOULD BEC OME NON-SPECULATIVE ON THE ACTUAL RECEIPT OF DELIVERY OF GOODS. THE CRUX OF THE MATTER IS THAT A TRANSACTION, SO AS TO FALL U/S 43(5) OF THE ACT, MU ST BE SETTLED OTHERWISE THAN BY WAY OF ACTUAL DELIVERY. THERE CAN BE NO QUESTION O F TREATING A TRANSACTION AS SPECULATIVE UP TO ONE STAGE AND THEREAFTER NON-S PECULATIVE ON RECEIPT OF DELIVERY. A TRANSACTION IS EITHER SPECULATIVE OR NO N-SPECULATIVE. IT CANNOT BE A COMBINATION OF BOTH. SINCE THE ASSESSEE RECEIVED DE LIVERY OF SHARES, THE CHARACTER OF NON-SPECULATIVE TRANSACTION CANNOT BE CHANGED BY VIEWING THIS TRANSACTION AS ON 31/3/2005, TILL WHICH DATE NO DELI VERY WAS RECEIVED. MOREOVER, IT IS NOT A CASE THAT TRANSACTIONS OF PUR CHASE WERE SETTLED OTHERWISE THAN BY WAY OF ACTUAL DELIVERY. ADMITTEDLY, THE ASSE SSEE RECEIVED THE DELIVERY OF SHARES AFTER MAKING DUE PAYMENT BY CHEQUES. BY N O STRETCH OF IMAGINATION, THESE TRANSACTIONS OF PURCHASE CAN BE CONSIDERED AS SPECULATIVE TRANSACTIONS. IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THAT TH E TRANSACTIONS FOR PURCHASE OF SHARES OF LIL MADE BY THE ASSESSEE ARE GENUINE. FURTHER SUCH SHARES WERE PURCHASED AS STOCK IN TRADE IN A NON-S PECULATIVE BUSINESS AND 3 THE RESULTANT LOSS ARISING OUT OF THE VALUATION OF SUCH SHARES AT THE MARKET RATE ON THE YEAR END, WHICH IS OBVIOUSLY LESS THAN THE CO ST PRICE, IS FULLY ALLOWABLE. I, THEREFORE, AGREE WITH THE VIEW TAKEN BY THE LD. J M AND ANSWER THE QUESTION POSED TO ME IN AFFIRMATIVE BY HOLDING THA T THE LD. CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO O N ACCOUNT OF DISALLOWANCE OF LOSS IN SHARES AMOUNTING TO RS.40,01,670. THE REGIST RY OF THE TRIBUNAL IS DIRECTED TO LIST THIS MATTER BEFORE THE DIVISION BE NCH FOR PASSING AN ORDER IN ACCORDANCE WITH MAJORITY VIEW. 2. THEREFORE, IN ACCORDANCE WITH MAJORITY VIEW, THE AP PEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/08/2014. SD/ SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 14 TH AUGUST, 2014 * RANJAN COPY FORWARDED TO :- 1. THE ITO, WARD 6(1), JAIPUR. 2. SMT. MEENA BAID, JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 534/JP/2011) BY ORDER, AR ITAT JAIPUR