The Jt.CIT., (OSD)-Circle-7, Ahmedabad V. Smt. Bhartiben Bharatbhai Patel, Ahmedabad

ITA 535/AHD/2006

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9882 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 18-08-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 03-03-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Additional evidence; Assessment record; Condonation of delay; Set aside; Capital Gains
• Section: 142(1); 143(2); 68; 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MUKUL SHRAWAT, JM & SHRI A N PAHUJA,AM ITA NOS. 747 AND 2782/AHD/2006 (ASSESSMENT YEAR:-2001-02) BHARTIBEN BHARATBHAI PATEL, 305, ASHWAMEGH AVENUE, MITHAKHALI, AHMEDABAD [PAN: ACZPP 0040 L] V/S JOINT COMMISSIONER OF INCOME-TAX (OSD), CIRCLE-7, AHMEDABAD [APPELLANT] [RESPONDENT] ITA NO.535/AHD/2006 (ASSESSMENT YEAR:-2001-02) JOINT COMMISSIONER OF INCOME-TAX (OSD), CIRCLE- 7, AHMEDABAD V/S BHARTIBEN BHARATBHAI PATEL, 305, ASHWAMEGH AVENUE, MITHAKHALI, AHMEDABAD [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI S N DIVATIA, AR REVENUE BY:- SHRI K M MAHESH, DR O R D E R A N PAHUJA: THESE CROSS APPEALS IN ITA NOS.747/A/06 AND 535/A/ 06 FILED AGAINST AN ORDER DATED 29-12-2005 AND APPEAL IN ITA NO.2782/A/06 FILED BY THE ASSESSEE AGAINST AN ORDER DATED 09-11- 2006 OF THE LD. CIT(APPEALS)-XIII, AHMEDABAD, RAISE THE FOLLOWING GROUNDS : ITA NO.747/AHD/2006[ASSESSEE] 1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O R ON FACTS IN CONFIRMING THE ADDITION TOWARDS CASH CREDIT TO THE EXTENT OF R S.15 LAKHS. 2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THAT THE CASH CREDIT OF RS.15 LAKHS WAS UNEXPLAINED. 3 THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT IN V IEW OF DUE INQUIRY MADE BY HIM, THE APPELLANT HAD CLEARLY DISCHARGED THE BU RDEN TO PROVE THE IMPUGNED CASH CREDITS. ITA NO.535,747 &2782/A/06 2 SUBSEQUENTLY, IN ITA NO.747/AHD/2006, THE ASSESSEE RAISED THE FOLLOWING MODIFIED ADDITIONAL GROUNDS OF APPEAL: 4.1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LOSS ARISING ON SALE OF SHARES WAS NOT THE SHORT TERM CA PITAL LOSS AS SHOWN IN THE RETURN OF INCOME, BUT BUSINESS LOSS AS DETERMIN ED BY AO IN THE ORDER OF ASSTT. 4.2 THAT THE LOSS ON SALE OF SHARES BE HELD AS BUSI NESS LOSS IN VIEW OF THE OBSERVATIONS MADE AND FINDINGS GIVEN BY AO. 4.3 THAT BOTH THE LOWER AUTHORITIES MAY PLEASE BE D IRECTED TO TREAT THE LOSS ON SALE OF SHARES AS BUSINESS LOSS INSPITE OF THE SAME CLAIMED BY SHORT TERM CAPITAL LOSS BY THE APPELLANT IN HER RETURN. ITA NO.535/AHD/2006[REVENUE] 1 THE LD. CIT(A)-XIII, AHMEDABAD HAS ERRED IN LAW AND ON FACTS WHILE GIVING DIRECTION TO ACCEPT THE LOSS OF RS.20, 81,149/- IN SHARE TRADING TRANSACTION. 2 THE LD. CIT(A)-XIII, AHMEDABAD HAS ERRED IN LAW A ND ON FACTS WHILE RESTRICTING THE ADDITION ON ACCOUNT OF CASH C REDIT OF RS.19,50,000/- TO RS.4,50,000/-(LATER REVISED TO RS . 15 LACS). 3. THE LD. CIT(A)-XIII, AHMEDABAD HAS ERRED IN L AW AND ON FACTS WHILE REDUCING DISALLOWANCE OF EXPENSES OF RS.20,00 0/- TO RS.10,000/-. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-XIII,AHMEDABAD OUGHT TO HAVE UPHELD HE ORDER OF THE ASSESSING OFFICER TO THE ABOVE EXTENT. 5. IT IS, THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A)- XIII,AHMEDABADMAY BE SET ASIDE TO THE ABOVE EXTENT AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NO.2782/AHD/2006[ASSESSEE] 1.1 THE ORDER PASSED BY CIT(A)-XIII, AHMEDABAD CON FIRMING THE ORDER PASSED U/S 154 DATED 17-3-2006 FOR AY 2001-02 BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND IN EXCESS OF THE POWERS U/S 154. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY FAILED TO APPRECI ATE THAT THERE WAS NO MISTAKE APPARENT FROM RECORD IN AS MUCH AS (A) THE ORIGINAL ASSESSMENT ITA NO.535,747 &2782/A/06 3 ORDER HAD MERGED WITH THE APPELLATE ORDER AND (B) T HE IMPUGNED RECTIFICATION WAS IN EXCESS OF THE POWERS OF AO SIN CE WHILE MAKING ASSESSMENT THE LOSS CLAIMED AS SHORT TERM CAPITAL L OSS IN THE RETURN OF INCOME WAS ASSESSED AS BUSINESS LOSS BY AO HIMSELF. 2.2 THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT TH E SUBJECT MATTER OF APPEAL WAS NOT THE NATURE OF LOSS ON SALE OF SHARES AND HE NCE THE OBSERVATIONS MADE AND CONCLUSIONS REACHED BY HIM ARE IN EXCESS O F JURISDICTION AND ARE NOT ADMITTED BY THE APPELLANT. 2.3 THE LD. CIT(A) OUGHT TO HAVE DIRECTED THE AO TO ALLOW SET OFF OF LOSS OF RS.20,81,149/- AGAINST OTHER INCOME. IT IS THEREFORE PRAYED THAT THE ORDER PASSED BY BOT H THE LOWER AUTHORITIES MAY BE QUASHED. 2 AT THE OUTSET, WE FIND THAT THE APPEAL IN ITA N O.747/AHD./2006 IS DELAYED BY 27 DAYS. IN AN AFFIDAVIT DATED 28-2-200 9 OF THE ASSESSEE, IT IS AVERRED THAT THOUGH THE APPEAL WAS REQUIRED TO BE FILED ON OR BEFORE28.2.2006, IT COULD BE FILED ONLY ON 27.3.2006 DUE TO DEATH OF HE R MOTHER-IN-LAW ON 16.2.2006 AND LATER THAT OF HER FATHER-IN- LAW IN 23.2.2006. SINCE SHE WAS MENTALLY DISTURBED AND WAS PREOCCUPIED WITH POST FUNERAL CEREMONIES FO R OVER A MONTH, APPEAL WAS DELAYED. ON THE OTHER HAND, THE LEARNED DR DID NOT OBJECT TO REQUEST FOR CONDONATION OF DELAY. 3.. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE REASONS FOR DELAY. THE ISSUE BEFORE US IS AS TO WHETHER OR NOT THERE WAS SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL. IN THE CASE OF STATE OF WEST BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY AIR 1972 SC 749, THE HON'BLE SUPREME COURT WHILE CONSIDERING THE SCOPE OF EXPRESSION 'SUFFICIE NT CAUSE' FOR CONDONATION OF DELAY HAVE HELD THAT THE SAID EXPRESSION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE THE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO THE PARTY. IN THE CASE OF VEDABAI ALI AS VAIJAYANTABAI BABULAO PATIL VS. SHANTARAM BABURAO PATIL & ORS., IT WAS HELD BY THE HONBLE APEX COURT THAT WHILE EXERCISING DISCRETION UNDER S. 5 OF THE LIMITATION ACT, 1963, TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT FILING THE APPEAL WITHIN TH E PERIOD PRESCRIBED, COURTS SHOULD ADOPT A PRAGMATIC APPROACH. IT HAS BEEN CONSISTENTL Y HELD BY THE HONBLE APEX COURT ITA NO.535,747 &2782/A/06 4 THAT IN THE MATTER OF CONDONATION OF DELAY, A LIBER AL AND PRAGMATIC VIEW SHOULD BE TAKEN . IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE REASONS GIVEN BY THE ASSESSEE IN HER AFFIDAVIT FOR THE DELAY OF 27DAYS APPEAR TO BE SUFFICIENT CAUSE AND, ACCORDINGLY, THE DELAY OF 27 DAYS IN FILING THE APPEAL IS CONDONED. 4. ADVERTING NOW TO GROUND NOS. 1 TO 3 IN T HE APPEAL OF THE ASSESSEE IN ITA NO.747/AHD/2006 AND GROUND NOS.1& 2 IN THE APPEAL OF THE REVENUE, FACTS, IN BRIEF, AS PER RELE VANT ORDERS ARE THAT RETURN DECLARING LOSS OF RS.20,39,406/- FILE D ON 30-10-2001 BY THE ASSESSEE, CARRYING ON THE BUSINESS OF SUPPLYIN G OF BANDAGES TO HOSPITALS BESIDES HAVING INVESTMENT IN SHARES, AFT ER BEING PROCESSED ON 26-08-2002 U/S 143(1)(A) OF THE INCOME -TAX ACT,1961[HEREINAFTER REFERRED TO AS THE ACT] WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) O F THE ACT ON 22-10- 2002. THOUGH THE ASSESSEE INVESTED IN SHARES, NO B OOKS OF ACCOUNTS WERE AVAILABLE WITH THE ASSESSEE NOR ANY SUCH BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE ASSESSING OFFICER [AO IN SHORT] DURING THE COURSE OF ASSESSMENT PROCEEDINGS DESPITE REPEATED REQUESTS. SINCE THE ASSESSEE FAILED TO COMPLY WITH THE TERMS OF NOTICE U/S 143(2) OF THE ACT NOR PRODUCED RELEVANT BOOKS OF ACCOUNTS AND VOUCHERS/BILLS DESPITE SUFFICIENT OPPORTUNITY A LLOWED, THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT AND DE NIED THE CLAIM OF SHORT TERM LOSS MADE IN THE RETURN OF INCOME. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED ON GOING TH ROUGH ACCOUNT OF THE ASSESSEE APPEARING IN BOOKS OF INFINITE FINA NCIAL SERVICES PVT. LTD.[IFSL] THAT THE ASSESSEE DEPOSITED RS.15, 00,000/- ON 7-4- 2000 AND RS.4,50,000/- ON 12-5-2000 IN HER ACCOUNT. VIDE NOTICE U/S 142(1) OF THE ACT, THE ASSESSEE WAS ASKED TO EXPLAI N SOURCES FROM WHERE THESE FUNDS WERE OBTAINED AND PAID TO INFINIT E FINANCIAL SERVICES PVT. LTD. IN RESPONSE, THE ASSESSEE'S AUT HORIZED REPRESENTATIVE FILED REPLY DATED 10-03-2004,WHEREIN THE ASSESSEE ITA NO.535,747 &2782/A/06 5 DENIED HAVING PAID RS.15,00,000/- ON 7-4-2000 AND RS.4,50,000/- ON 12-5-2000 TO HER BROKER INFINITE FINANCIAL SERVI CE PVT. LTD AND EXPRESS HER INABILITY TO EXPLAIN THESE CASH CREDITS IN HER ACCOUNT. THE AO DID NOT ACCEPT THIS EXPLANATION OF THE ASSES SEE ON THE GROUND THAT NOBODY WILL DEPOSIT SUCH HUGE AMOUNT OF RS.19,50,000/- IN ASSESSEES ACCOUNT AND BY DISOWNING THE AMOUNT O F RS.19.50 LACS, THE ASSESSEE WAS TRYING TO EVADE INQUIRIES R EGARDING ACQUISITION/SOURCES OF THESE FUNDS. SINCE THE ASSES SEE DID NOT EXPLAIN THE SOURCE OF PAYMENT OF THE SAID AMOUNT, R ELYING UPON DECISIONS IN THE CASE OF SREELEKHA BANERJEE V S. CIT 1963 (49 ITR 482)(SC), ROSAHN DI HATTI VS. CIT (1977) 107 IT R 936(SC), KALE KHAN MOHAMMED HANIF VS. CIT (1963) 50 ITR 1 (SC) AND SHA HKAR INDUSTRIES VS. CIT (1978) 114 ITR 689 (CAL.), THE AO ADDED THE AMOUNT U/S 68 OF THE ACT, THE ASSESSEE HAVING FAILED TO DISCHARGE THE ONUS OF EST ABLISHING THE SOURCE OF THE AMOUNT AND GENUINENESS OF THE TRANSACTIONS . 5.. ON APPEAL, THE LD. CIT(A) REDUCED THE ADDITION TO RS. 15 LACS AFTER HAVING A REMAND REPORT FROM THE AO IN THE FOL LOWING TERMS: 7. I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHO RIZED REPRESENTATIVE CAREFULLY. AS REGARDS THE GROUND OF APPEAL REGARDING THE SHARE TRADING LOSS OF RS.20,81,149/-, I FIND THAT T HE APPELLANT HAS TRADED IN SHARES OF LISTED COMPANIES THROUGH THE SHARE BROKER WHO IS A MEMBER OF STOCK EXCHANGE AND THE APPELLANT HAS FURNISHED A ST ATEMENT SHOWING PURCHASE AND SALE TRANSACTIONS SUPPORTED BY BILLS O F BROKER. THE APPELLANT HAS INCURRED LOSS IN TRADING OF SHARES OF SATYAM CO MPUTERS, HUGHES SOFTWARE, PENTAFOUR SOFTWARE, VSNL, HIMACHAL FUTURI STIC COMMUNICATION AND OTHER SUCH SHARES AND GENUINENESS OF SHARE TRAN SACTIONS IS ESTABLISHED BY THE SUIT FILED BY THE BROKER AND THE COPIES OF ACCOUNTS OF THE APPELLANT AS PER THE BOOKS OF IFSL AND SUPPORTED BY BILLS OF BROKER WHICH HAD BEEN OBTAINED BY THE ASSESSING OFFICER FROM IFS L AT THE TIME OF ASSESSMENT PROCEEDINGS. THE APPELLANT HAD ALSO SUBM ITTED A TAX AUDIT REPORT WHEREIN THE DETAILS OF SHARE TRANSACTIONS AN D LOSS HAS BEEN CERTIFIED BY THE TAX AUDITOR. THAT THE APPELLANT HAS INCURRED LOSS IN SUCH TRANSACTION OF SHARES IS FURTHER ESTABLISHED BY THE AMOUNT CLAI MED AS OUTSTANDING AND DUE TO THE SHARE BROKER IFSL. THEREFORE, THE DENIAL OF LOSS ARISING FROM SHARE TRADING BY THE ASSESSING OFFICER IS HELD TO B E NOT JUSTIFIED AND THE ASSESSING OFFICER IS DIRECTED TO ACCEPT THE LOSS IN SHARE TRANSACTIONS OF RS.20,81,149/-. ITA NO.535,747 &2782/A/06 6 8. AS REGARDS THE ADDITION OF CASH CREDIT, AN INQUI RY WAS MADE FROM THE MANEKCHOWK CO. OP. BANK LTD. MITHAKHALI BRANCH TO FIND OUT WHO HAS ISSUED THE ABOVESAID CHEQUES OF RS.7 LACS AND RS.8 LACS ON 7/4/2000. IN THIS CONNECTION COPIES OF LETTERS DATED 10-6-2000 A DDRESSED BY SHRI ARUN S. PANDYA, ADVOCATE TO MAHESH K. SHAH, A FULL TIME DIRECTOR OF IFSL HAVE BEEN FILED BY THE AUTHORIZED REPRESENTATIVE IN THE PAPER BOOK, IN WHICH SHRI ARUN S. PANDYA HAS STATED THAT HIS CLIENT MANU BHAI AMBALAL PATEL HAD ADVANCED RS.8 LACS AND HIS CLIENT BHAVIK RAMANBHAI PATEL HAD ADVANCED RS.7 LACS TO THE COMPANY IFSL ON 7-4-2000 BY CHEQUE S DRAWN IN FAVOUR OF MANECKCHAWK CO-OP. BANK LTD. AND HE ASKED THE COMPA NY IFSL TO REFUND THE AMOUNTS FAILING WHICH HE WOULD TAKE LEGAL ACTIO N AGAINST THE COMPANY. THEREFORE, THE BANK WAS ASKED TO CONFIRM WHETHER TH E SAID CHEQUE NO. 696493 DATED 7.4.2000 OF RS.7 LACS AND CHEQUE NO. 2 89666 DATED 7/4/2000 OF RS.8 LACS HAVE BEEN ISSUED BY BHAVIK RA MANBHAI PATEL AND MANUBHAI AMBALAL PATEL RESPECTIVELY AND TO FURNISH THEIR COPIES OF ACCOUNTS WITH THE BANK. THE COPIES OF ACCOUNTS OBTA INED FROM THE BANK WERE SHOWN TO THE AUTHORIZED REPRESENTATIVE .THESE SHOW THAT THE ABOVE CHEQUES HAVE BEEN ISSUED BY BHAVIK PATEL, 5, HARSID DH SOCIETY AND MANUBHAI AMBALAL PATEL, 6, HARSIDDH SOCIETY, SATELL ITE ROAD. THOUGH THE DEPOSITS OF RS.7 LACS AND RS.8 LACS HAVE NOT BEEN M ADE BY THE APPELLANT DIRECTLY, THE SAME HAVE BEEN MADE BY HER RELATIVES HAVING COMMON ADDRESS AS THAT OF THE APPELLANT. FURTHER NO EXPLAN ATION HAS BEEN FURNISHED BY THE APPELLANT AS TO WHY THE SAID CHEQU ES OF RS.7 LACS AND RS.8 LACS WERE CREDITED IN THE ACCOUNT OF THE APPEL LANT BY THE BROKER IFSL. A LETTER WAS WRITTEN TO IFSL ON 16/12/2005 TO CONFI RM WHETHER THERE WAS ANY ORAL OR WRITTEN INSTRUCTION FROM THE APPELLANT TO ADJUST THE AMOUNT OF RS.19.50 LACS. THE IFSL REPLIED VIDE LETTER DATED 2 0 TH DECEMBER, 2005 THAT THE CHEQUES OF RS.7 LACS AND RS.8 LACS ISSUED BY SH RI BHAVIK RAMANLAL PALEL AND SHRI MANUBHAI AMBALAL PATEL WERE HANDED O VER TO THEM BY SHRI BHARATBHAI PATEL, HUSBAND OF THE APPELLANT AND THE IFSL WAS GIVEN ORAL INSTRUCTION TO ADJUST THE AMOUNT OF RS.19.50 LACS A ND TO CREDIT THE ACCOUNT OF SMT. BHARTIBEN PATEL. IN VIEW OF THE ABOVE FACTS , AS THE APPELLANT HAS NOT SATISFACTORILY EXPLAINED THE SOURCE OF CREDITS OF RS.7 LAC AND RS.8 LACS, THE ADDITION OF UNEXPLAINED CASH CREDIT OF RS.15 LA KHS MADE IN THE ACCOUNT OF THE APPELLANT IS UPHELD. AS REGARDS THE JOURNAL ENTRY OF RS.4,50,000/-, THE COMPANY IFSL HAS CREDITED THE APPELLANT'S ACCOU NT BY DEBITING RAMANLAL PATEL'S ACCOUNT ON 12/5/2000. THEREFORE, T HE SAID DEPOSIT OF RS.4,50,000/- HAS NOT BEEN MADE BY THE APPELLANT AN D IT IS ALSO NOT A CASH CREDIT AND THE SAID CREDIT HAS BEEN CONTESTED BY TH E APPELLANT IN CIVIL SUIT . HENCE, ADDITION IS REDUCED TO THE TUNE OF RS.4.50 L ACS ON ACCOUNT OF THE JOURNAL ENTRY. 6. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAIN ST THE AFORESAID FINDINGS OF THE LD. CIT(A) ,UPHOLDING THE ADDITION OF RS. 15 LACS WHILE THE REVENUE IS IN APPEAL FOR DELETING THE AD DITION OF RS.4.5 LACS APART FROM DISPUTING THE FINDINGS OF THE LD. C IT(A) ,DIRECTING THE AO TO ACCEPT THE LOSS CLAIMED BY THE ASSESSEE. THE LD. DR PLEADED ITA NO.535,747 &2782/A/06 7 THAT SINCE AFORESAID TWO CHEQUES WERE FOUND CREDI TED IN THE BOOKS OF IFSL IN THE ACCOUNT OF THE ASSESSEE AND CREDIT O F RS. 4.5 LACS WAS ALLOWED THROUGH A JOURNAL ENTRY BY DEBITING RAMANLA L PATEL'S ACCOUNT ON 12/5/2000, A HEAVY ONUS WAS PLACED ON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS AND EXPLAIN THE SOU RCES OF PAYMENT OF THE AMOUNT AS ALSO ARRANGEMENT WITH THE AFORESAID THRE E PERSONS MENTIONE DIN THE IMPUGNED ORDER, WHO HAD MADE PAYMENTS ON BEHALF OF THE ASSESSEE. ENQUIRIES BY THE LD. CIT(A) REVEALED THAT CHEQUES WERE CREDIT ED IN THE ACCOUNT OF THE ASSESSEE ON THE INSTRUCTIONS OF HUSBAND OF THE ASSE SSEE, WHO ADMITTEDLY USED TO TRADE IN SHARES THROUGH THE TERMINAL OF THE SA ID COMPANY IFSL. SINCE THE ASSESSEE NEITHER PRODUCED BOOKS OF ACCOUNTS NOR F URNISHED ANY EVIDENCE IN RESPECT OF EITHER CREDITWORTHINESS OF THE CREDITO RS AND INSTEAD ALTOGETHER DENIED THE TRANSACTIONS AND MATTER IS STATED TO BE PENDING IN A CIVIL SUIT , THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF EVEN RS. 4.5 LACS. AS REGARDS DIRECTIONS OF THE LD. CIT(A) FOR ACCEPTING THE LOSS RETURNED BY THE ASSESSEE IN SHARE TRANSACTIONS , THE LD. DR VEHEMENTLY ARGUED THAT THE ASSESSEE HAVING NOT PRODUCED RELEVANT BOOKS OF ACCOUNTS OR VOUCHERS FOR THE SAID TRANSACTIONS BEFORE THE AO, THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECT ING TO ACCEPT THE RETURNED LOSS. AS REGARDS ADDITIONAL GROUNDS RAISED BY THE ASSESSE E, THE LD. DR SUBMITTED THAT THERE IS NOTHING TO SUGGEST THAT THE ASSESSEE WAS C ARRYING ON BUSINESS OF TRADING IN SHARES. IN THE AYS 2002-03 TO 2004-05 , RETURNS REVEALED THAT THERE WAS NO SUCH TRADING ACTIVITY IN SHARES WHILE IN THE RETUR NS FOR THE AYS. 2000-01 & 2001- 02, THE ASSESSEE RETURNED SHORT TERM CAPITAL LOSS UNDER THE HEAD CAPITAL GAINS APART FROM INCOME UNDER THE HEAD HOUSE PROPERTY A ND PROFIT/LOSS FROM HER BUSINESS OF IN THE NAME OF NESHAL TRADERS.. NOT EV EN A WHISPER HAS BEEN MADE BEFORE THE AO OR THE LD. CIT(A) THAT THE ASSESSEE W AS CARRYING ON THE BUSINESS OF TRADING IN SHARES NOR THE ASSESSEE PRODUCED RELEVA NT BOOKS OF ACCOUNTS BEFORE THE AO. CONSEQUENTLY NO FINDING ON THAT ASPECT HAS BEEN RECORDED BY THE AO/LD. CIT(A). THE AO MERELY DISALLOWED THE CLAIM FOR SHOR T TERM CAPITAL LOSS, THE ASSESSEE HAVING FAILED TO SUBSTANTIATE THE CLAIM. S INCE ADMITTEDLY NO SUCH CLAIM OF BUSINESS OF TRADING IN SHARES HAD BEEN MADE BEFO RE THE AO IN THE RETURN OF HER INCOME, THE LD. DR RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN ITA NO.535,747 &2782/A/06 8 THE GOETZE (INDIA) LTD.,284 ITR 323(SC) AND CONTEND ED THAT NO SUCH ISSUE AS HAS BEEN MENTIONED IN THE ADDITIONAL GROUNDS ,ARISE S FROM THE IMPUGNED ORDER. 6.1 ON THE OTHER HAND, THE LD. AR ON BEHALF OF TH E ASSESSEE WHILE REITERATING THEIR SUBMISSIONS BEFORE THE LD. CIT(A) CONTENDED T HAT NO BOOKS OF ACCOUNTS WERE AVAILABLE IN RESPECT OF TRANSACTIONS IN SHARES AND THAT IS WHY PENALTY U/S 271A OF THE ACT HAD BEEN IMPOSED.. WHILE RELYING UP ON THE DECISION REPORTED IN 15SOT 252(BOMBAY) AND CIT VS, RAMCO INTERNATIONAL,2 21CTR(P&H)491, THE LD. AR ARGUED THAT DECISION IN THE CASE OF GOETZE (INDI A LTD.) WAS NOT APPLICABLE TO THE FACTS OF THE CASE, THE ASSESSEE HAVING NEVER MA DE A CLAIM OF BUSINESS IN SHARES .IT WAS THE AO ALONE WHO CHANGED THE HEAD OF INCOME FROM CAPITAL GAINS TO BUSINESS. AS REGARDS CASH CREDITS, THE LD. AR CO NTENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS. 15 LACS U/S 68 OF THE ACT. THE LEARNED AR FURTHER SUBMITTED THAT THEIR PETITION IN CIVIL SUIT SHOWED THAT THE COMPANY AND BROKER SHRI MAHESH SHAH EXCEED ED THEIR AUTHORITY. TO A QUERY BY THE BENCH, THE LD. AR AGRE ED TO FILE COPY OF PETITIONS IN THE SUIT /COUNTER SUIT INVOLVING THESE TRANSACTIONS AND REPLY BY THE RESPONDENTS. HOWEVER, THE LD. AR DID NOT CARE TO FILE THESE DOCU MENTS UNTIL NOW NOR EVEN SUBMITTED A COPY OF DECISION REPORTED IN 15SOT 252( BOMBAY). THE LEARNED AR ALSO SUBMITTED THAT THE AO HAD BEEN DIRECTED BY THE LD. CIT(A) U/S 250(4) TO MAKE INQUIRY INTO SOURCE OF RS.19.50 LACS. THE BURDEN WAS ON THE DEPARTMENT TO PROVE CREDIT IN THIRD PART Y ACCOUNT AND FOR THIS PROPOSITION, HE REFERRED TO THE DECISION OF TH E HONBLE GUJARAT HIGH COURT IN THE CASE OF KRISHNA TEXTILE 310 ITR 2 27 (GUJ). 7 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE FACTS OF THE CASE. UNDISPUTEDLY, THE ASSESSEE DID NOT PRODUC E THE RELEVANT BOOKS OF ACCOUNTS IN RESPECT OF SHARE TRANSACTIONS BEFOR E THE AO NOR THE BILLS FOR SUCH TRANSACTIONS, EVEN WHEN THE ACCOUNTS OF THE ASSESSE E ARE STATED TO HAVE BEEN AUDITED. THOUGH THE TOTAL TURNOVER IN SHARES WAS ST ATED TO BE RS.4,19,85,676/- BY THE AUDITORS IN THE NOTES TO ACCOUNTS, THE ASSESSE E FILED A CHART BEFORE THE AO REVEALING TURNOVER OF ONLY RS.1,83,80,722/-. IN THE ACCOUNTS OF INFINITE FINANCIAL ITA NO.535,747 &2782/A/06 9 SECURITIES LTD., THROUGH WHOM THE ASSESSEE PURCHAS ED AND SOLD SHARES REVEALED DEBIT BALANCE OF RS.64,56,731/- AS ON 31.3.2001 BUT THIS ENTRY DID NOT APPEAR IN THE BALANCESHEET OF THE ASSESSEE. AS A RESULT, THE AO FINALIZED ASSESSMENT U/S 144 OF THE ACT IN THE ABSENCE OF BILLS AND BOOKS O F ACCOUNTS AND LOSS OF RS. 20,81,149/- CLAIMED IN THE RETURN WAS NOT ACCEPTED. BESIDES AN AMOUNT OF RS. 19.5 LACS APPEARING IN THE ACCOUNT OF THE ASSESSEE IN THE BOOKS OF INFINITE FINANCIAL SECURITIES LTD. WAS ADDED U/S 68 OF THE A CT, THE ASSESSEE HAVING FAILED TO EXPLAIN THE SOURCES OF PAYMENT OF THE SAID AMOUN T. ON APPEAL, THE ASSESSEE CONTENDED THAT BOOKS OF ACCOUNTS AND OTHER MATERIAL HAD BEEN TAKEN BEFORE DIFFERENT CIVIL AUTHORITIES IN CIVIL PROCEEDINGS AN D WERE TO BE TRACED OUT. INSTEAD OF PRODUCING BOOKS OF ACCOUNTS BEFORE THE LD. CIT(A), THE ASSESSEE FILED A PAPER BOOK, CONTAINING ADDITIONAL EVIDENCE. ON THE DIREC TIONS OF THE LD. CIT(A), THE AO CONDUCTED ENQUIRIES AND STATED IN HER REPORT DATE D 11-11-2005 THAT AS PER THE LEDGER ACCOUNT OF IFSL, AN AMOUNT OF RS.7 LACS HAS BEEN DEPOSITED ON 7-4-2000 BY CHEQUE NO.. 696493 DRAWN ON MANEKCHOWK CO.OP. BA NK AND ANOTHER SUM OF RS.8 LACS HAS BEEN DEPOSITED BY CHEQUE NO.289666 DR AWN ON MANEKCHOWK CO. OP. BANK ON THE SAME DATE AND FURTHER AN AMOUNT OF RS.4,50,000/- HAS BEEN CREDITED TO THE ACCOUNT OF THE ASSESSEE BY JOURNAL ENTRY BY DEBITING RAMANBHAI I. PATEL'S ACCOUNT. THE AFORESAID TWO CHEQUES HAVE BEE N ISSUED BY BHAVIK PATEL, 5, HARSIDDH SOCIETY AND MANUBHAI AMBALAL PATEL, 6, HAR SIDDH SOCIETY, SATELLITE ROAD, WHO ARE STATED TO BE RELATIVES OF THE ASSESS EE AND ARE HAVING COMMON ADDRESS AS THAT OF THE ASSESSEE. THE IFSL REPLIED V IDE LETTER DATED 20 TH DECEMBER, 2005 THAT THE CHEQUES OF RS.7 LACS AND RS .8 LACS ISSUED BY SHRI BHAVIK RAMANLAL PALEL AND SHRI MANUBHAI AMBALAL PAT EL WERE HANDED OVER TO THEM BY SHRI BHARATBHAI PATEL, HUSBAND OF THE ASSES SEE WITH THE ORAL INSTRUCTIONS TO ADJUST THE AMOUNT OF RS.19.50 LACS AND TO CREDIT THE ACCOUNT OF SMT. BHARTIBEN PATEL. ON THE OTHER HAND , THE ASSESSEE ALL ALONG STATED THAT SHE HAS NOTHING TO DO WITH THE AMOUNT OF RS. 19.50 LACS NOR PRODUCED T HE RELEVANT BOOKS OF ACCOUNTS OR ANY OTHER EVIDENCE . SINCE THE FACTS R ELATING TO THE TRANSACTIONS ENTERED IN TO BY THE ASSESSEE ARE WITHIN HER SPECI AL KNOWLEDGE ,THE BURDEN OF PROVING THE RELEVANT FACTS IS ON THE ASSESSEE IN T ERMS OF PROVISIONS OF SEC. 106 OF THE INDIAN EVIDENCE ACT,1872. THE LD. CIT(A) OR THE AO ALSO DID NOT CARE TO ASCERTAIN FROM SHRI BHAVIK RAMANLAL PALEL AND SHRI MANUBHAI AMBALAL PATEL AS ITA NO.535,747 &2782/A/06 10 TO ON WHOSE INSTRUCTIONS THEY HAD ISSUED THESE CHEQ UES NOR THEIR IDENTITY OR CREDITWORTHINESS IS EVIDENT FROM RECORDS. THERE IS NOTHING TO SUGGEST AS TO WHY ACCOUNT OF SHRI RAMANBHAI I. PATEL'S WAS DEBITED F OR AN AMOUNT OF RS. 4.5 LACS AND ON WHOSE INSTRUCTIONS. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN THE LD. AR DID NOT FILE COPIES OF PETITIONS FOR CIVIL SUIT/C OUNTER SUIT AND OTHER CONNECTED MATERIAL BEFORE US NOR COMPLETE FACTS IN RELATION TO THE AFORESAID CREDIT OF RS. 19.50 LACS ARE EVIDENT FROM THE IMPUGNED ORDERS AN D THE LD. AR TOOK UP A PLEA BEFORE THE LD. CIT(A) THAT ENQUIRIES ON THE ISSUE W ERE NOT COMPLETE, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF T HE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE ISSUES RAISED IN THE GROUNDS RAISED BY THE ASSESSEE AND GROUND NO.1 RAISED BY THE REVENUE IN T HEIR APPEAL, AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF OUR AFORESAID O BSERVATIONS, AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLES S TO SAY THAT WHILE REDECIDING THE ISSUE, THE LEARNED CIT(A) SHALL PASS A SPEAKING ORDER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISIONS OF SEC. 250(6) OF T HE ACT. WITH THESE OBSERVATIONS, GROUND NOS. 1 TO 3 IN THE APPEAL OF THE ASSESSEE I N ITA NO.747/AHD/2006 , AND GROUND NO.2 IN THE APPEAL OF THE REVENUE ARE DISPOSED OF. 8. AS REGARDS GROUND NO.1 IN THE APPEAL OF THE R EVENUE REGARDING ACCEPTANCE OF LOSS IN SHARE TRANSACTIONS BY THE LD. CIT(A), WE FIND FROM THE IMPUGNED ORDER THAT THE ASSESSEE TRADED I N SHARES OF LISTED COMPANIES THROUGH THE SHARE BROKER, A MEMBER OF STO CK EXCHANGE AND FURNISHED A STATEMENT SHOWING PURCHASE AND SALE TRA NSACTIONS SUPPORTED BY BILLS OF BROKER BEFORE THE LD. CIT(A). IT WAS NOTED THAT THE ASSESSEE INCURRED LOSS IN TRADING OF SHARES OF SATYAM COMPUTERS, HUGHES SOFTW ARE, PENTAFOUR SOFTWARE, VSNL, HIMACHAL FUTURISTIC COMMUNICATION AND OTHER S UCH SHARES AND GENUINENESS OF SHARE TRANSACTIONS WAS ESTABLISHED B Y THE SUIT FILED BY THE BROKER AND THE COPIES OF ACCOUNTS OF THE ASSESSEE AS PER T HE BOOKS OF IFSL AND SUPPORTED BY BILLS OF BROKER WHICH HAD BEEN OBTAINE D BY THE ASSESSING OFFICER FROM IFSL AT THE TIME OF ASSESSMENT PROCEEDINGS. TH E LD. CIT(A) FURTHER OBSERVED THAT TAX AUDIT REPORT ALSO REVEALED THE DE TAILS OF SHARE TRANSACTIONS AND LOSS HAS BEEN CERTIFIED BY THE TAX AUDITOR AND THIS WAS SUPPORTED BY THE AMOUNT ITA NO.535,747 &2782/A/06 11 CLAIMED AS OUTSTANDING AND DUE TO THE SHARE BROKER IFSL. ACCORDINGLY, THE LD. CIT(A) DIRECTED THE AO TO ACCEPT THE LOSS IN SHARE TRANSACTIONS OF RS.20,81,149/-. THE LD. DR APPEARING BEFORE US DID NOT CONTROVERT T HESE FINDINGS OF FACTS RECORDED BY THE LD. CIT(A) AFTER HAVING A REMAND REPORT FROM THE AO NOR REFERRED US TO ANY MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIE W IN THE MATTER. IN THESE CIRCUMSTANCES, WE HAVE NO HESITATION IN UPHOLDING T HE FINDINGS OF THE LD. CIT(A). THEREFORE, GROUND NO.1 IN THE APPEAL OF THE REVENUE IS DISMISSED. 9. AS REGARDS ADDITIONAL GROUNDS OF APPEAL NOW S OUGHT TO BE RAISED BEFORE US, AS ALREADY POINTED OUT THE AO WH ILE COMPLETING BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT ON THE GROUND THAT THAT THE ASSESSEE DID NOT COMPLY WITH TERMS OF NOTICE U/ S 143(2) OF THE ACT NOR PRODUCED THE RELEVANT BOOKS OF ACCOUNTS, D ISALLOWED THE CLAIM FOR SHORT TERM CAPITAL LOSS OF RS.20,81,149 /- ON ACCOUNT OF SHARES RETURNED UNDER THE HEAD CAPITAL GAINS. ON AP PEAL, THE LD. CIT(A) AFTER HAVING A REMAND REPORT FROM THE AO DIR ECTED HIM TO ACCEPT THE LOSS IN SHARE TRANSACTIONS. THE AO ,ACC ORDINGLY, GAVE EFFECT TO THE ORDER OF THE LD. CIT(A). WE FIND FROM GROUNDS RAISED IN THE APPEAL BEFORE THE LD. CIT(A) THAT NO SUCH GROUN D RELATING TO CLAIM OF LOSS IN SHARES AS BUSINESS LOSS WAS EVER RAISED BEFORE THE LD. CIT(A). NOT EVEN A WHISPER HAS BEEN MADE IN THE IMPUGNED ORDERS REGARDING THE CLAIM NOW BEING PREFERRED BEFO RE US THROUGH ADDITIONAL GROUNDS OF APPEAL IN RESPECT OF LOSS IN SHARES AS BUSINESS LOSS. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN NO SUCH FACTS ARE AVAILABLE ON RECORD NOR THE GROUND RELATING TO CLA IM OF LOSS IN SHARES AS BUSINESS LOSS, WAS RAISED BEFORE THE LD. CIT(A), CONSEQUENTL Y, SUCH ISSUES NOW RAISED BEFORE US DO NOT EMERGE FROM THE IMPUGNED ORDER OF THE LD. CIT(A). IF THERE IS NO DECISION OF THE FIRST APPELLATE AUTHORITY AND NO GR OUND IS TAKEN IN THE APPEAL FILED BEFORE HIM ON A PARTICULAR PORTION OF THE ASSESSMEN T, IT CAN NOT BE SAID THAT THE ASSESSEE IS STILL AGGRIEVED BY THE DECISION OF THE FIRST APPELLATE AUTHORITY IN NOT GRANTING SUCH RELIEF TO HIM. HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION IN CIT VS. KARAMCHAND PREMCHAND PRIVATE LTD.,74 ITR 25 4(GUJ) HELD THAT THE TRIBUNAL IS NOT ENTITLED TO ALLOW THE ASSESSEE TO AGITATE AN ISSUE WHICH WAS NOT ITA NO.535,747 &2782/A/06 12 RAISED BEFORE THE FIRST APPELLATE AUTHORITY AND T HERE IS NO DECISION OF SUCH AUTHORITY ON THE ISSUE, EVEN IF THE ASSESSEE HAS RAISED THE ISSUE IN THE MEMORANDUM OF APPEAL AND SEEKS TO AGITATE IT. .SIMI LARLY IN SMT. ARUDHANTI BALKRISHNA VS. ITO,103 ITR 763(GUJ), THE HONBLE JU RISDICTIONAL HIGH COURT HELD THAT THE ASSESSEE IS NOT ENTITLED TO QUESTION THE D ECISION OF THE OFFICER ON A POINT IN AN APPEAL TO THE TRIBUNAL, WHICH WAS NOT RAISED OR DECIDED BY THE APPELLATE ASSISTANT COMMISSIONER. SIMILAR VIEW WAS TAKEN IN HUKAMCHAND & MANNALAL & CO.,126 ITR 251(MP), UGAR SUGAR WORKS LTD. VS. CIT, 141 ITR 326(BOM.). CIT VS. ANAND PRASAD [1981] 128 ITR 388 (DELHI) AND CI T VS. CELLULOSE PRODUCTS OF INDIA LTD. [1985] 151 ITR 499 (GUJ) [FB]). AS CONC LUDED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA : 66 ITR 443 , THE APPELLATE AUTHORITY HAD NO JURISDICTION T O ASSESS THE SOURCE OF INCOME WHICH WAS NOT DISCLOSED EITHER IN THE RETURN OR PRO CESSED IN THE ASSESSMENT ORDER. HONBLE GUJARAT HIGH COURT IN THE CASE OF SA HELI SYNTHETICS PVT LTD V. CIT, 302 ITR126 ALSO CATEGORICALLY TOOK A SIMILAR VIEW IN THE BACKGROUND OF THE AFORESAID DECISION OF THE HONBLE SUPREME COURT I N CIT V. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA (SUPRA) WHEREIN THE HON BLE SUPREME COURT CATEGORICALLY OBSERVED AND NOTED THAT IT IS NOT OPE N TO THE APPELLATE AUTHORITY TO TRAVEL OUTSIDE THE RECORD, THAT IS, THE RETURN MADE BY THE ASSESSEE OR THE ASSESSMENT ORDER OF THE INCOME TAX OFFICER WITH A V IEW TO POINT OUT A NEW SOURCE OF INCOME. IN THE LIGHT OF VIEW TAKEN IN THESE D ECISIONS, WE ARE OF THE OPINION THAT A NEW ROUND CAN BE PERMITTED IN APPEAL SO LON G AS THE RELEVANT FACTS ARE ON RECORD AND THE GROUND SOUGHT TO BE RAISED COULD NO T HAVE BEEN RAISED EARLIER FOR GOOD REASONS. AS NOTED IN NATIONAL THERMAL POWER CO RPORATION LTD V. CIT, 229 ITR 383(SC), THE TRIBUNAL HAS THE DISCRETION TO ALL OW OR NOT TO ALLOW A NEW GROUND TO BE RAISED. A NEW GROUND MAY BE ALLOWED TO BE RAI SED ONLY WHEN IT ARISES FROM THE FACTS WHICH ARE ON RECORD. SINCE ISSUES RAISED IN THE AFORESAID ADDITIONAL GROUNDS IN THE APPEAL BEFORE US DO NOT EMERGE FRO M THE IMPUGNED ORDER NOR HAVE BEEN RAISED BEFORE THE LD. CIT(A), ACCORDINGLY , IN THE LIGHT OF AFORESAID DECISIONS OF THE HONBLE APEX COURT AND JURISDICTI ONAL HIGH COURT, WE HAVE NO ALTERNATIVE BUT TO REJECT THE PRAYER OF ADMISSION OF THE AFORESAID ADDITIONAL GROUNDS . ITA NO.535,747 &2782/A/06 13 10. NEXT GROUND NO.3 IN THE APPEAL OF THE REVENUE RELATES TO REDUCTION OF DISALLOWANCE OF EXPENSES OF RS.20,000/ - TO RS.10,000/-. THE AO NOTICED THAT THE ASSESSEE WAS DOING THE BUS INESS OF BANDED CLOTHS (BANDAGES) UNDER THE TRADE NAME NESHA L TRADERS AND REFLECTED LOSS OF RS.35057/- IN THIS BUSINESS ON T HE SALES OF RS.27,685/-. THE DETAILS OF EXPENSES INCURRED BY TH E ASSESSEE REVEALED THAT FREIGHT EXPENSES OF RS.27000/- WERE I NCURRED ON TOTAL TURN OVER OF RS.35067/-. SINCE THE ASSESSEE DID NOT FURNISH ANY PROOF OF INCURRING SUCH EXPENSES, THE AO TERMED TH ESE EXPENSES UNREASONABLE AND EXCESSIVE AND THEREFORE, DISALLOWE D AN AMOUNT OF RS.20,000/-. 11. ON APPEAL, THE LEARNED CIT(A) REDUCED THE DISAL LOWANCE WITH THE FOLLOWING OBSERVATIONS: 9.1 DISPUTING THE SAID DISALLOWANCE THE AR OF THE APPELLANT SUBMITTED THAT THE AO HAS MADE THE DISALLOWANCE ON AD-HOC BAS IS AND THE SAME IS EXCESSIVE LOOKING TO THE NATURE AND VOLUME OF BUSIN ESS OF THE APPELLANT AND IT SHOULD BE REDUCED. 9.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR CAR EFULLY. I FIND FROM THE ASSESSMENT RECORDS THAT NO DETAILS HAVE BEEN FI LED BY THE APPELLANT. HOWEVER, THE DISALLOWANCE OF ENTIRE AMOUNT OF EXPEN SES IS FOUND TO BE NOT JUSTIFIED. HENCE, THE DISALLOWANCE IS REDUCED TO RS .10,000/-. 12. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A) .THE LEARNED DR SUPPORTE D THE ORDER OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE ASSESSEE S UPPORTED THE FINDINGS OF THE LD. CIT(A). 13. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE . SINCE THE DISALLOWANCE WAS MADE PURELY O N ESTIMATE AND THE LD. CIT(A) REDUCED THE ESTIMATE IN THE ABSENCE OF DETAILS WHILE THE LD. DR DID NOT REFER US TO ANY MATERIAL, WARRAN TING FURTHER DISALLOWANCE, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). THEREFORE, GROUND NO.3 IN THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO.535,747 &2782/A/06 14 ITA NO.2782/AHD/2006[ASSESSEE] 14. AS ALREADY MENTIONED ABOVE, WHILE COMPLETING BE ST JUDGMENT ASSESSMENT U/S 144 OF THE ACT ON THE GROUND THAT TH AT THE ASSESSEE DID NOT COMPLY WITH TERMS OF NOTICE U/S 143(2) OF T HE ACT NOR PRODUCED THE RELEVANT BOOKS OF ACCOUNTS, THE AO DI SALLOWED LOSS OF OF RS.20,81,149/- ON ACCOUNT OF SHARES RETURNED UN DER THE HEAD CAPITAL GAINS BESIDES AN ADDITION OF RS.19,50,000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE .ON APPEAL, T HE LD. CIT(A) DIRECTED THE AO TO ACCEPT THE LOSS IN SHARE TRANSA CTIONS. THE AO ACCORDINGLY GAVE EFFECT TO THE ORDER OF THE LD. CIT (A). 15. SUBSEQUENTLY, THE ASSESSEE POINTED OUT IN A LET TER DATED 8.3.2006 THAT THERE WAS MISTAKE IN THE ORDER GIVIN G EFFECT TO THE ORDER OF THE LD. CIT(A). THE ASSESSEE CLAIMED THAT LOSS OF RS. 20,81,149/- WAS BUSINESS LOSS REQUIRED TO BE SET OF F AGAINST INCOME OF RS.15,51,743/-. HOWEVER, THE AO REJECTED THE SA ID REQUEST FOR RECTIFICATION VIDE ORDER DATED 17.3.2006 IN THE FOL LOWING TERMS::- PLEASE REFER TO YOUR LETTER DATED 8.3.2006 WHEREIN YOU HAVE ALLEGED THAT THERE IS A MISTAKE IN THE ORDER GIVING EFFECT TO OR DER OF CIT(A), IN YOUR LETTER UNDER REFERENCE YOU HAVE CLAIMED THAT LOSS OF RS,20 ,81,149/- IS A BUSINESS LOSS WHICH IS REQUIRED TO BE SET OFF AGAINST THE IN COME OF RS.15,51,743/-. ON PERUSAL OF THE RECORDS, IT IS SEEN THAT THE CLAI M AS PER YOUR LETTER UNDER REFERENCE IS MISCONCEIVED AND FAR FROM TRUTH. YOUR ATTENTION IS INVITED TO THE RETURN OF INCOME FILED BY YOU IN FORM NO.2D ON 30.10.2001 WHEREIN AGAINST COL.NO.18 I.E. CAPITAL GAINS YOU HAVE SHOWN LOSS OF RS.20,81,149/- AS SHORT TERM CAPITAL LOSS. IN THE .STATEMENT OF IN COME FILED ALONG WITH THE SAID RETURN OF INCOME ALSO THE AMOUNT OF RS.20,81,1 49/- SHOWN AS SHORT TERM CAPITAL LOSS. IN THE ORDER OF ASSESSMENT U/S 1 43(3) DATED 15-3-2000 ALSO THE ASSESSING OFFICER DID NOT CONSIDER THE SAI D LOSS AS BUSINESS LOSS / INCOME. THE HEAD OF INCOME IN RESPECT OF SHORT TERM CAPITAL LOSS OF RS.20,81,149/- CLGIMED IN TH RETURN BY YOU HAS NOT BEEN CHANGED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS SIMPLY TAKEN THE SAID LOSS AT RS. NIL. THE LD. CIT(A) ALSO DID NOT CHANGE THE HEAD OF INCO ME IN RESPECT OF THE SAID LOSS BUT HAS DIRECTED TO ACCEPT THE LOSS IN SH ARE TRANSACTIONS AT RS.20,81,149/- AS CLAIMED BY YOU IN THE RETURN FILE D. ITA NO.535,747 &2782/A/06 15 LOSS COMPUTED UNDER THE HEAD CAPITAL GAIN CANNOT BE SET OFF AGAINST INCOME FROM BUSINESS OR FROM INCOME UNDER ANY OTHER HEAD. CAPITAL LOSS CAN BE SET OFF ONLY AGAINST CAPITAL GAIN. IN THE RE TURN- OF INCOME AND THE STATEMENT OF INCOME YOU HAVE SHOWN THE LOSS UNDER T HE HEAD SHORT TERM CAPITAL LOSS. IN THE CIRCUMSTANCES THE SAID LOSS CANNOT BE SET OF F AGAINST ANY OTHER INCOME. THUS THERE IS NO MISTAKE APPARENT FROM RECO RD WITHIN THE MEANING AND SCOPE, OF SECTION 154 OF THE INCOME TAX ACT, 19 61. YOUR APPLICATION IS THEREFORE HEREBY REJECTED. 16. ON APPEAL, THE LD. CIT(A) UPHELD THE FINDINGS O F THE AO IN THE FOLLOWING TERMS: 1.1 THE PRESENT APPEAL IS DIRECTED AGAINST THE REJ ECTION OF THE APPLICATION FILED BY THE APPELLANT U/S. 154 OF THE ACT FOR A.Y. 2001-02. THE FACTS OF THE CASE IN BRIEF ARE THAT AT THE TIME OF FILING HER RETURN OF INCOME FOR A.Y. 2001-02, THE APPELLANT HAD WORKED OUT SHOR T TERM CAPITAL LOSS OF RS.20,81,149/- ON ACCOUNT OF PURCHASE AND SALE OF C ERTAIN SHARES. A PART OF THE LOSS WAS ADJUSTED AGAINST OTHER INCOME. WITH THE RESULT NET SHORT TERM CAPITAL LOSS OF RS.20,39,406/- WAS DECLARED IN THE RETURN. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE LOSS SO DECLARED AT RS.20,81,149/- WAS NOT ACCEPTED TO BE GENUINE BY THE ASSESSING OFFICER FOR THE REASON THAT THE APPELLANT COULD NOT SUBSTANTIATE IT BY PRODUCIN G THE BOOKS OF ACCOUNTS AND OTHER MATERIAL LIKE BILLS / VOUCHERS REGARDING PURCHASE AND SALE OF SHARES. ON BEING TAKEN UP THE MATTER IN APPEAL, MY ID. PREDECESSOR HAS OBSERVED THAT THE DENIAL OF LOSS AS CLAIMED BY THE APPELLANT WILL NOT BE JUSTIFIED AND ACCORDINGLY, HE DIRECTED THE .ASSESSI NG OFFICER TO ACCEPT THE LOSS OF RS. 20,81,149/-. THE RELEVANT PARA 7 OF ID. CIT(A)'S ORDER IS REPRODUCED AS UNDER: 'I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHORIZE D REPRESENTATIVE CAREFULLY. AS REGARDS THE GROUND OF APPEAL REGARDING THE SHARE TRADING LOSS OF RS.20,81,149/-, I FIND TH AT THE APPELLANT HAS TRADED IN SHARES OF LISTED COMPANIES THROUGH THE SH ARE BROKER WHO IS A MEMBER OF STOCK EXCHANGE AND THE APPELLANT HAS FURNISHED A STATEMENT SHOWING PURCHASE AND SALE TRANSACTIONS SU PPORTED BY BILLS OF BROKER. THE APPELLANT HAS INCURRED LOSS IN TRADING OF SHARES OF SATYAM COMPUTERS, HUGHES SOFTWARE, PENTAFOUR SOF TWARE, VSNL, HIMACHAL FUTURISTIC COMMUNICATION AND OTHER S UCH SHARES .AND GENUINENESS OF SHARE TRANSACTIONS IS ESTABLISH ED BY THE SUIT FILED BY THE BROKER AND THE COPIES OF ACCOUNTS OF T HE APPELLANT AS PER THE BOOKS OF IFSL AND SUPPORTED BY BILLS OF BRO KER WHICH HAD BEEN OBTAINED BY THE ASSESSING OFFICER FROM IFSL AT THE TIME OF ASSESSMENT PROCEEDINGS. THE APPELLANT HAD ALSO SUBM ITTED A TAX AUDIT REPORT WHEREIN THE DETAILS OF SHARE TRANSACTI ONS AND LOSS HAS BEEN CERTIFIED BY THE TAX AUDITOR. THAT THE APPELLA NT HAS INCURRED ITA NO.535,747 &2782/A/06 16 LOSS IN SUCH TRANSACTION OF SHARES IS FURTHER ESTAB LISHED BY THE AMOUNT CLAIMED AS OUTSTANDING AND DUE TO THE SHARE BROKER IFSL. THEREFORE, THE DENIAL OF LOSS ARISING FROM SHARE TR ADING BY THE ASSESSING OFFICER IS HELD TO BE NOT JUSTIFIED AND T HE ASSESSING OFFICER IS DIRECTED TO ACCEPT THE LOSS IN SHARE TRA NSACTIONS OF RS.20,81,149/-. 1.2 SUBSEQUENT TO THE DISPOSAL OF APPEAL BY THE ID. CIT(A), THE APPELLANT SEEMS TO HAVE MOVED AN APPLICATION BEFORE THE ID. ASSESSING OFFICER TO ADJUST THE LOSS AMOUNT OF RS.20,81,149/- AGAINST THE OTHER ASSESSABLE INCOME TREATING THE THE SAME TO BE A BUS INESS LOSS. THE APPLICATION SO FILED HAS BEEN REJECTED BY THE JCIT( OSD), CIRCLE-7, AHMEDABAD WHILE PASSING THE ORDER U/S. 154 OF THE I .T. ACT ON 17IH MARCH, 2006. AGAINST THE SAID REJECTION OF THEIR APPLICATI ON, THE APPELLANT HAS FILED THE PRESENT APPEAL. 2.1 SHRI S.N. DIVETIA, ADVOCATE APPEARED ON BEHALF OF THE APPELLANT AND SUBMITTED THAT IT WAS WRONG ON THE PART OF THE ASSE SSING OFFICER NOT TO TREAT THE LOSS OF RS.20,81,149/- AS THEIR BUSINESS LOSS. ACCORDING TO THE AUTHORIZED REPRESENTATIVE, ALL THE PURCHASE AND SAL E TRANSACTIONS OF THE APPELLANT HAVE BEEN TREATED TO BE BUSINESS TRANSACT IONS BY THE ASSESSING OFFICER AND AFTER HAVING CONSIDERED THE TOTALITY OF FACTS AND CIRCUMSTANCES, THE ID ASSESSING OFFICER HAS TREATED IT AS A BUSINE SS LOSS. THE ID. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT TH E BUSINESS LOSS SO HELD BY THE ASSESSING OFFICER HAS BEEN CONFIRMED AT THE APPELLATE STAGE BUT ONLY WITH ONE DIFFERENCE THAT AS AGAINST THE REJECT ION OF LOSS BY THE ID. ASSESSING OFFICER, THE CIT(A) HAS ALLOWED IF. THE I D. AUTHORIZED REPRESENTATIVE WANTED ME TO ISSUE A DIRECTION TO TH E ASSESSING OFFICER TO THE EFFECT THAT THE LOSS UNDER CONSIDERATION MAY BE ADJUSTED AGAINST THE OTHER ASSESSABLE INCOME OF THE APPELLANT FOR THE CU RRENT YEAR. ON BEING ENQUIRED HOWEVER, THE AUTHORIZED REPRESENTATIVE; FA IRLY CONCEDED THAT THE APPELLANT HAD CLAIMED THE LOSS OF RS.20,81,149/- TO BE A SHORT TERM CAPITAL LOSS AT THE TIME OF FILING THE RETURN. 3.1 IN ORDER TO DECIDE THE ISSUE, I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER OF THE ASSESSING OFFICER, THE APPE LLATE ORDER OF THE ID. CIT(A) AND HAVE ALSO CONSIDERED THE ARGUMENTS OF TH E AUTHORIZED REPRESENTATIVE IN THIS REGARD. THERE IS NO DISPUTE THAT THE APPELLANT HERSELF HAS CLAIMED THE LOSS OF RS.20,81,149/- AS HER SHORT TERM CAPITAL LOSS WHILE FILING HER RETURN OF INCOME IN COL. NO. 18 OF FORM NO. 2D FILED ON 30 TH OCTOBER, 2001. IT IS ALSO NOT DISPUTED THAT THE SAM E LOSS WAS CLAIMED AS SHORT TERM CAPITAL LOSS IN THE COMPUTATION OF HER I NCOME FILED ALONG WITH THE RETURN. PERUSAL OF THE BALANCE-SHEET FILED ALONG WI TH THE RETURN FOR THE PERIOD ENDING 31/3/2001 ALSO SHOWS THAT THE APPELLA NT HAD SHOWN INVESTMENT IN THE SHARES TOTALING TO RS.43,15,483.2 4 PAISA, IN OTHER WORDS, PURCHASE AND SALE OF SHARES WAS NEVER TREATED BY TH E APPELLANT AS HER BUSINESS. IN THIS BACKGROUND OF THE MATTER, I CANNO T BUT TO HOLD THAT THE LOSS OF RS.20,81,149/- HAS TO BE TREATED AS A CAPIT AL LOSS AND NOT AS BUSINESS LOSS AS CLAIMED BY THE APPELLANT. THE ARGU MENT OF THE AUTHORIZED ITA NO.535,747 &2782/A/06 17 REPRESENTATIVE THAT THE SAID LOSS HAS BEEN HELD TO BE A BUSINESS LOSS .BY THE ID. ASSESSING OFFICER AS WELL AS BY THE CIT(A), THE SAME, IS ALSO NOT ACCEPTABLE BECAUSE THERE IS NO SUCH FINDING TO THAT EFFECT EITHER BY THE ASSESSING OFFICER OR BY THE ID. CIT(A) IN THEIR RES PECTIVE ORDERS. THE ASSESSING OFFICER HAS RATHER REJECTED THE CLAIM OF CAPITAL LOSS OF RS.20,81,149/- MADE BY THE APPELLANT IN HER RETURN OF INCOME BECAUSE THE APPELLANT COULD NOT PRODUCE ANY EVIDENCE WHATSOEVER TO PROVE SUCH A LOSS. SHE EXPRESSED HER INABILITY TO PRODUCE BOOKS OF ACCOUNTS NOR COULD SHE PRODUCE ANY PURCHASE/SALE BILLS / VOUCHERS AS A CCORDING TO HER, THESE DOCUMENTS WERE NOT TRACEABLE. IN SUCH A BACKGROUND WHERE THE APPELLANT HAD HARDLY MADE ANY EFFORT TO PROVE THE LOSS, LEAST OF SAYING IT AS A BUSINESS LOSS, THE ARGUMENT THAT THE ASSESSING OFFI CER HAD HELD IT AS A BUSINESS LOSS APPEARS TO BE TOTALLY MISPLACED . THE ASSESSING OFFICER HAS REJECTED THE CLAIM OF LOSS AS SUCH LEAST OF ACCEPTI NG IT AS A BUSINESS LOSS. 3.2 IN SO FAR AS THE APPELLATE OLDER OF THE ID. CIT (A) IS CONCERNED, THERE IS NO SUCH FINDING THAT THE LOSS UNDER CONSIDERATIO N MAY BE TREATED AS A BUSINESS LOSS AS IS ALLEGED BY THE APPELLANT. THE R ELEVANT PORTION OF HIS ORDER HAS BEEN REPRODUCED ABOVE IN PARA 1.1 PERUSAL OF WHICH WOULD MAKE IT EVIDENT THAT THERE WAS NO SUCH DIRECTION IN THE ORDER OF THE ID. CIT(A). AT BEST, IT CAN BE INFERRED THAT SHORT TERM CAPITAL LOSS OF RS.20,81,149/- AS CLAIMED BY THE APPELLANT IN HER R ETURN OF INCOME HAS BEEN HELD TO BE ALLOWABLE BY THE ID. CIT(A). I HAVE THEREFORE, NO HESITATION TO CONFIRM THE ACTION OF THE ASSESSING OFFICER IN R EJECTING THE RECTIFICATION APPLICATION FILED BY THE APPELLANT IN THIS REGARD. 17. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LEARNED AR ON BEHAL F OF THE MERELY STATED THAT ISSUE IS CONSEQUENTIAL AND REITERATED THEIR SUBMISSIONS BEFORE THE CIT(A) .ON THE OTHER HAND, THE LEARNED D R SUPPORTED THE FINDINGS OF THE LD. CIT(A). 18. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. AS IS APPARENT FROM THE FACTS OF THE CASE AND AS POINTED OUT IN THE TAX AUDIT REPORT, THE ASSESSEE HAD MEREL Y MADE INVESTMENT IN SHARES. ACCORDINGLY, THE ASSESSEE RET URNED SHORT TERM CAPITAL LOSS IN THE RETURN OF INCOME FOR THE AY 2 001-02. IN THE RETURN OF INCOME FOR THE AY 2000-01 ALSO SHORT TERM CAPITAL LOSS UNDER THE HEAD CAPITAL GAINS HAD BEEN SHOWN. THERE IS NOTHING IN THE ASSESSMENT ORDER TO SUGGEST THAT THE AO TREATED THE RETURNED SHORT TERM CAPITAL LOSS AS BUSINESS LOSS NOR THE L D. CIT(A) ITA NO.535,747 &2782/A/06 18 CONCLUDED SO. WE FIND THAT NO SUCH GROUND WAS EVEN RAISED BEFORE THE LD. CIT(A). IT WAS ONLY THROUGH THE LETTER DAT ED 8.3.2006 THAT THE ASSESSEE SUBMITTED THAT LOSS OF RS.20,81,149 W AS BUSINESS LOSS. AS POINTED OUT BY THE LD. CIT(A) IN THE IMPUG NED ORDER, THE AO REJECTED THE CLAIM OF CAPITAL LOSS OF RS.20,81,149/ - MADE BY THE APPELLANT IN HER RETURN OF INCOME SINCE THE ASSESSEE DID NOT PRODUC E ANY EVIDENCE WHATSOEVER TO PROVE SUCH A LOSS AND EXPRESSED HER INABILITY TO P RODUCE BOOKS OF ACCOUNTS NOR COULD SHE PRODUCE ANY PURCHASE/SALE BILLS / VOUCHER S AS ACCORDING TO HER, THESE DOCUMENTS WERE NOT TRACEABLE. NEITHER THE AO NOR TH E LD. CIT(A) RECORDED ANY FINDING THAT THAT SUCH A LOSS WAS BUSINESS LOSS NOR SUCH CLAIM APPEARS TO HAVE BEEN MADE BEFORE THE AO OR THE LD. CIT(A) IN THE QU ANTUM PROCEEDINGS. IN THESE CIRCUMSTANCES, THE PLEA OF THE ASSESSEE THAT THERE WAS MISTAKE IN THE ORDER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A) IS BAS ELESS. THE PRESENT IS A CASE WHERE THE ASSESSEE SOUGHT TO INVOKE THE JURISDICTIO N OF THE AO TO RECTIFY THE ORDER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A). IF TH E RECORD DOES NOT CONTAIN ANY MATERIAL, IT CANNOT BE SAID THAT THE AO COMMITTED A MISTAKE IN OMITTING TO GRANT RELIEF. THE JURISDICTION UNDER SECTION 154 OF THE A CT, AS POINTED OUT BY THE HONBLE APEX COURT IN ITO V. ASOK TEXTILES LTD. [1961] 41 ITR 732 , IS WIDER THAN THAT PROVIDED UNDER RULE I OF ORDER XLVII OF THE CODE OF CIVIL PROCEDURE, 1908. RULE I OF ORDER XLVII OF THE CODE CONFINES THE JURISDICTIO N OF THE COURT TO THE RECTIFICATION OF ' AN ERROR APPARENT ON THE FACE OF THE RECORD ' WHILE SECTION 154 OF THE ACT (WHICH CORRESPONDS TO SECTION 35 OF THE INDIAN INCO ME-TAX ACT, 1922), USES WIDER LANGUAGE AND EMPOWERS THE INCOME-TAX AUTHORITIES TO RECTIFY ANY MISTAKE ' APPARENT FROM THE RECORD '. NONE THE LESS, THERE MU ST BE MATERIAL TO SUPPORT THE CLAIM TO RELIEF AND UNLESS SUCH MATERIAL CAN BE REF ERRED TO, NO GRIEVANCE CAN BE MADE IF THE AO REFUSES TO RECTIFY THE ASSESSMENT . IT HAS ALSO NOT BEEN SHOWN TO US THAT ALL THE MATERIAL REQUIRED FOR THE CLAIM THA T LOSS IN SHARES WAS ,IN FACT, BUSINESS LOSS WAS BEFORE THE AO AT THE TIME WHEN TH E INCOME-TAX ASSESSMENT WAS COMPLETED. EVEN NO SUCH ISSUE SEEMS TO HAVE BE EN RAISED BEFORE THE AO OR THE LD. CIT(A). CONSEQUENTLY, THERE IS NO QUESTION OF ANY MERGER AS MENTIONED IN THE GROUNDS OF APPEAL. ITA NO.535,747 &2782/A/06 19 18.1 MOREOVER, IT IS SETTLED LAW THAT A MISTAKE APPARENT FROM THE RECORD IS ONE THAT IS PATENT, MANIFEST AND SELF-EVIDENT AND WHICH DOES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENT TO ESTABLISH IT. A PERUSAL OF SECTION 154 SHOWS THAT THE INTERVENTION OR ASSUMPTION OF JURIS DICTION UNDER SECTION 154 CAN BE MADE ONLY TO CORRECT AN ERROR OR A MISTAKE, WHIC H WAS APPARENT AND NOT WHERE A DEBATABLE ISSUE COULD BE CONSIDERED. IN OTHER WOR DS, A LOOK AT THE RECORD MUST SHOW THAT THERE HAS BEEN AN ERROR AND THAT ERROR MA Y BE RECTIFIED. IN THIS CONNECTION, HONBLE SUPREME COURT HELD IN THE CASE OF T.S.BALARAM,ITO VS. VOLKART BROTHERS& OTHERS,82 ITR 50(SC) THAT .IT WAS NOT OPEN TO THE INCOME-TAX OFFICER TO GO IN TO THE TRUE SCOPE OF THE RELEVANT PROVISIONS OF THE ACT IN A PROCEEDING UNDE R SECTION 154 OF THE INCOME- TAX ACT, 1961. A MISTAKE APPARENT ON THE RECORD MUS T BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH, CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. AS SEEN EARLIER, THE HIGH COURT OF BOMBAY OPINED, THAT THE ORIGINAL ASSESSMENTS WERE IN ACCORDANCE WITH LAW THOUGH IN OUR OPINION THE HIGH COURT WAS NOT JUSTIFIED IN GOING INTO THAT QUESTION. IN SATYANARAYAN LAXMINARA N HEGDE V. MALLIKARJUN BHAVANAPPA TIRUMALE, THIS COURT WHILE SPELLING OUT THE SCOPE OF THE POWER OF A HIGH COURT UNDER ARTICLE 226 OF THE CONSTITUTION RU LED THAT AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD--SEE SIDHRAMAPPA ANDANNAPPA MANVI V. COM MISSIONER OF INCOME- TAX. THE POWER OF THE OFFICERS MENTIONED IN SECTION 154 OF THE INCOME-TAX ACT, 1961 TO CORRECT ' ANY MISTAKE APPARENT FROM THE REC ORD ' IS UNDOUBTEDLY NOT MORE THAN THAT OF THE HIGH COURT TO ENTERTAIN A WRIT PET ITION ON THE BASIS OF AN ' ERROR APPARENT ON THE FACE OF THE RECORD. ' 18.2. IF THE ISSUE REQUIRES DEBATE AND DISCUSSION, IT CAN NOT BECOME A SUBJECT- MATTER OF RECTIFICATION UNDER SECTION 154 OF THE AC T BECAUSE UNDER THIS SECTION ONLY PATENT AND OBVIOUS MISTAKES OF LAW AND FACTS C AN BE RECTIFIED. IN THE LIGHT OF AFORESAID DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF VOLKART BROTHERS& OTHERS(SUPRA) IT IS NOT OPEN TO THE AO TO GO INTO T HE TRUE SCOPE OF THE RELEVANT PROVISIONS OF THE ACT IN PROCEEDINGS UNDER SECTION 154 OF THE ACT WHILE GIVING EFFECT TO THE ORDER OF THE LD. CIT(A) . IT IS CLEAR FROM THE FACTS OF THE CASE THAT THE ISSUE AS TO WHETHER OR NOT LOSS ON ACCOUNT OF SHAR ES WAS SHORT TERM CAPITAL LOSS OR BUSINESS LOSS CAN NOT BE ADJUDICATED IN PROCEED INGS U/S 154 OF THE ACT AND THAT TOO WHILE GIVING EFFECT TO THE ORDER OF THE LD . CIT(A) .ESPECIALLY WHEN THERE IS ITA NO.535,747 &2782/A/06 20 NOTHING TO SUGGEST THAT SUCH AN ISSUE WAS RAISED BE FORE THE AO OR THE LD. CIT(A). 18.3 IN VIEW OF THE FOREGOING, WE DO NOT FIND BASIS WHICH ENABLES US TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) . THE REFORE, GROUND NOS.1.1 TO 2.3 IN THIS APPEAL ARE DISMISSED. 19. GROUND NOS. 4 &5 IN THE APPEAL OF THE REVENUE BEING PRAYER AND GENERAL ONLY, DO NOT REQUIRE ANY SEPARATE ADJUD ICATION AND ARE, THEREFORE, DISMISSED. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.2782/AHD./2006 IS DISMISSED WHILE THE APPEAL OF THE ASSESSEE IN IT A NO. 737/AHD./2006 AND THAT OF THE REVENUE IS ITA NO. 53 5/AHD./2006 ARE PARTLY ALLOWED, BUT FOR STATISTICAL PURPOSES.. ORDER PRONOUNCED IN THE COURT TODAY ON 30 -9-2010 SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 30-09-2010 COPY OF THE ORDER FORWARDED TO: 1. BHARTIBEN BHARATBHAI PATEL, 305, ASHWAMEGH AVENU E, MITHAKHALI, AHMEDABAD 2. JCIT (OSD), CIRCLE-7, AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XIII, AHMEDABAD 5. DR, BENCH-C, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD