ITO 3(1)(1), MUMBAI V. AMERICORP CAPITAL P. LTD, MUMBAI

ITA 5446/MUM/2009

• Counselvise Citation: 544619914 RSA 2009
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-10-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 01-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: ARVIND DALAL; RAKESH UPADHYAYA
• Keywords: Speculation loss
• Section: 234B; 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI R.S.SYAL, AM AN D SHRI R.S.PADVEKAR, JM ITA NO.5446/MUM/2009 : ASST.YEAR 2005-2006 THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 3(1) MUMBAI. VS. M/S.AMERICORP CAPITAL PRIVATE LIMITED 1005, MAKER CHAMBER, NARIMAN POINT MUMBAI 400 021 PAN : AABCG0127E. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.G.K.NAIR RESPONDENT BY : S/SHRI ARVIND DALAL & RAKESH UPADHYAYA O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRECT ED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 24.07.2009 IN RELATI ON TO THE ASSESSMENT YEAR 2005-2006. 2. FIRST GROUND IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) HOLDING THAT THE LOSS OF RS.68,02,524 INCURRED BY THE ASS ESSEE IN DERIVATIVE TRAD ING SHOULD NOT BE CONSIDERED AS SPECULATION LOSS. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THIS GROUND ARE COVERED AGAINST THE ASSESS EE BY THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. BHARAT R. RUIA (HUF) [199 TAXMANN 87 (BOM.)] IN WHICH IT HAS BEEN HE LD THAT SUCH TRANSACTION W OULD FALL WITHIN THE AMBIT OF SECTION 43(5) AND FURTHER CL AUSE (D) OF PROVISO TO SEC TION 43(5) IS PROSPECTIVE AND APPLICABLE FROM ASSESSMEN T YEAR 2006-2007 ONLY. SIMILA R VIEW HAS BEEN TAKEN BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF SHREE CAPITAL SERVICES VS. ACIT [(2009) 28 DTR (KOL) (TRIB.)] 1] . IN VIEW OF THIS LEGAL POSITION ADMITTED TO BE ITA NO.5446/MUM/2009 M/S.AMERICORP CAPITAL PRIVATE LIMITED. 2 APPLICABLE BY BOTH THE SIDES, WE OVERT URN THE IMPUGNED ORDER ON THIS ISSUE AND DIRECT THAT THE LOSS OF RS.68.02 LAKHS BE CONSIDERED AS SPECULATION LOSS AS THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2005-2006 AND THE PROVISO (D) TO SECTION 43(5) SHALL BE APPLICABLE ONLY FR OM ASSESSMENT YEAR 2006-2007. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, TAKING RESORT TO THE PROVISIONS OF RULE 27 OF ITAT RULES, CONTENDED THAT EVEN IF SU CH LOSS IS CONSIDERED AS SPECULATIVE, IT SHOULD BE ALLOWED TO SET OFF AGAINST OT HER INCOME. THE LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED THE ATTEMPT OF THE LEARNED A.R. IN INVOKING THE PROVISIONS OF RULE 27 OF ITAT RULES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. IT IS NOTICED THAT RULE 27 GIVES THE RESPONDENT A LIBERTY TO SUPPORT THE ORDER APPEALED AGAINST ON THE GROUNDS WHICH WE RE DECIDED AGAINST HIM NOTWITHSTANDING THE FACT THAT A SEPARATE APPEAL WAS NOT FILED. AT THIS JUNC TURE IT WOULD BE RELEVANT TO NOTE THE PROVISIONS OF RULE 27 W ITH ITS MARGINAL NOTE AS UNDER:- RESPONDENT MAY SUPPORT ORDER ON GROUNDS DECIDED AGAINST HIM. 27. THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEAL ED, MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF TH E GROUNDS DECIDED AGAINST HIM. 6. FROM THE ABOVE PRESCRIP TION OF RULE 27 IT IS EVIDEN T THAT THE RESPONDENT CAN SUPPORT THE ORDER APPEALED AGAINST ON THE GR OUNDS DECIDED AGAINST THEM EVEN IF IT IS NOT IN APPEAL OR NO CROSS OBJECTION IS FILED. WE HAVE PERUSED THE IMPUGNED ORDER AS WELL AS THE ASSESSMENT ORDER A ND IT IS NOTED THAT THERE IS NO DISCUSSION ON THIS ASPECT WHICH THE LEARNED A.R. WANTS TO COVER UNDER RULE 27. AS LIBERTY UNDER RULE 27 EXTENDS ONLY TO THE POINTS DECIDED AGAINS T THE RESPONDENT IN THE IMPUGNED ORDER. IT CANNOT TAKE CARE OF A SITUATION IN WHICH THE ISSUE HAS NOT AT ALL BEEN DISCUSSED EITHER IN THE ASSESSMENT ORDER OR IN THE IMPUGNED ORDER, WHAT TO TALK OF DECIDING AGAINST THE RESPONDENT IN THE IMPUGNED ORDER. IN VIEW OF THE PR EVAILING FACTUAL SITUATION AS ITA NO.5446/MUM/2009 M/S.AMERICORP CAPITAL PRIVATE LIMITED. 3 DISCUSSED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEES CONTENTION REGARDING RULE 27 CANNOT BE ACCEPTED. 7. SECOND GROUND RAISED BY THE REVENUE IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) FOR NOT CHARGING INTEREST U/ SS.234B AND 234C WHEN THE INCOME WAS COMPUTED U/S.115JA. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD IT IS NOTICED THAT THE HONBLE SUPREME COURT IN ITS RECENT JUDGEMENT IN JCIT VS. ROLTA INDIA LTD. [(2011) 330 ITR 470 (SC)] HAS HELD THAT INTE REST IS CHARGEABLE U/S.234B AND 234C WHEN INCOME IS COM PUTED U/S.115JA / JB. THE IMPUGNED ORDER, BEING NOT IN CONFORMITY WITH THE AFORE-NOT ED PRECEDENT OF THE HIGHEST COURT OF THE LAND, DESERVES TO BE AND IS HEREBY SET ASI DE ON THIS ISSUE. WE, THEREFORE, HOLD THAT INTEREST U/S 234B AND 234C IS CHARGEABLE IN THE INSTANT CASE. THIS GROUND IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE, 2011. SD/- SD/- ( R.S.PADVEKAR ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 30 TH JUNE, 2011. DEVDAS*` COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXVIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. ITA NO.5446/MUM/2009 M/S.AMERICORP CAPITAL PRIVATE LIMITED. 4 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.