M/S. NICHI IMPEX PVT.LTD., MUMBAI V. ADDL.CIT.RG.9(2), MUMBAI

ITA 6391/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7781 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 03-11-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K SINGH; S S RANAMRS VANDANA SAGAR
• Assessee Lawyers: RANGESH BANKA
• Keywords: Retrospective amendment; Speculation loss; Futures and options
• Section: 43B; 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI D.MANMOHAN, VP AND SHRI T.R. SOOD, AM I.T.A. NO. 6391/MUM/08 ASSESSMENT YEAR :2005-06 M/S. NICHI IMPEX PVT. LTD., 518, PANCHARATNA BLDG., OPERA HOUSE, NEAR ROXY CINEMA, CHARNI ROAD, MUMBAI 400 004 PAN: AAACJ 1058 J VS. THE ADDL. COMMISSIONER OF INCOME-TAX, RAGE 9(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY :: SHRI RANGESH BANKA RESPONDENT BY :: SHRI S.S. RANA/MRS. VANDANA SAGAR & SHRI S.K. SINGH O R D E R PER T.R. SOOD (AM): IN THIS APPEAL, THE ASSESSEE RAISED THE FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONCLUDI NG THAT THE LOSS INCURRED ON INTRA DAY TRANSACTIONS FROM PURCHASE AND SALE OF FUTURES AND OPTIONS BE TREATED AS SPECULATION LOSS . 2. AT THE OUTSET, THE LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT NOW THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE SP ECIAL BENCH OF THE TRIBUNAL IN THE CASE OF SHREE CAPITAL SERVICES LTD. V. ACIT (2009) 121 ITD 498(KOL)(SB), WHEREIN IT HAS BEEN HELD THAT CLAUSE (D) OF PROVISO TO SECTION 43(5) WILL BE PROSPECTIVE APPLICATION. 3. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT V. ALOM EXTRUSIONS LTD., (319 ITR 306) HAS CLEARLY HELD THAT THE OMISSION OF THE SECOND PROVISO TO SECTION 43B WAS RETROSPECTIVE IN NATURE AND, THEREFORE, CLAUSE (D) TO PROVISO TO SECTION 43(5) W HICH WAS INSERTED WITH EFFECT FROM 1.4.2006 SHOULD BE HELD TO BE HAVING RETROSPECTIVE EFFECT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D FIND THAT THE DECISION IN THE CASE OF ALOM EXTRUSIONS LTD. (SUPRA) WAS RENDERED UNDER SECTION 43B IN ALTOGETHER DIFFERENT CIRCUMSTANCES AND WAS BASED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF 2 ALLIED MOTORS PVT. LTD. VS. CIT (224 ITR 677), IN W HICH IT WAS OBSERVED THAT WHEN THE PROVISO IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND T O MAKE THE SECTION WORKABLE, THEN SUCH OMISSION IS OF RETROSPECTIVE IN NATURE AND THE SAME PRINCIPLE WAS APPLIED IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. (SUPRA) WHEREAS INSERT ION OF CLAUSE (D) IN PROVISO TO SECTION 43(5) WILL NOT MAKE THE PROVISO UNWORKABLE FOR THE EARLIER YEARS. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIAL BENCH IN THE CASE OF SHREE CAPITAL SERVICES LTD. (SUPRA), WE DECIDE THE ISSUE AGAINST THE ASSESSEE. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED ON THIS 2 ND DAY OF FEBRUARY, 2010. SD. SD . (D. MANMOHAN) (T.R. SOOD ) VICE-PRESIDENT ACCOUNTANT MEMBR MUMBAI, DATED THE 2 ND FEBRUARY, 2010. KN COPY TO: 1. THE ASSESSEE. 2. THE ADDL.CIT, RANGE -9(2), MUMBAI 3. T2HE CITIX, MUMBAI 4. THE CIT(A)-IX, MUMBAI 5. THE DR, B BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, I.T.A.T.MUMBAI 3 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 02.02.2010 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 02.02.2010 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER