SARALA M. MAHESHWARI, MUMBAI V. CIT (A)-27, MUMBAI

ITA 6633/MUM/2009

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6611 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 28-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 30-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: S E DASTUR
• Keywords: Capital asset; Business income
• Section: 28; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 6633/MUM/2009 ASSESSMENT YEAR: 2004-05 SARALA M. MAHESHWARI MAHESHWARI HOUSE, 36, L. JAGMAHANDAS MARG, MUMBAI-400 030 VS. ITO-16(2)(1) MUMBAI (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :AALPM 2716 Q ASSESSEE BY : SHRI S.E. DASTUR & SHRI MADHUR AGARWAL REVENUE BY : SHRI PITAMBAR DAS DATE OF HEARING : 28.01.2014 DATE OF PRONOUNCEMENT : 23.04.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-27, MUMBAI DATED 08.10.2009 FOR THE ASSES SMENT YEAR 2004-05. 2. IN THIS APPEAL, THE ASSESSEE HAS AGITATED THE DE CISION OF THE LD.CIT(A) CONFIRMING THE ACTION OF THE AO IN DISALLOWING A SU M OF RS.70,38,887/- BEING LONG TERM CAPITAL LOSS ON SALE OF UNITS OF UTI UNIT SCHE ME 1964. 3. BRIEFLY STATED, THE ASSESSEE, AN INDIVIDUAL WHIL E DECLARING AN INCOME OF RS.4,61,550/- HAD CLAIMED A LONG TERM CAPITAL LOSS OF RS.70,38,887/- TO BE CARRIED FORWARD TO THE NEXT YEAR FOR SET OFF WHICH THE ASSE SSEE INCURRED ON SALE OF UNITS OF UTI SCHEME 1964. IN THE ASSESSMENT FRAMED U/S 143(3 ) OF THE ACT, THE AO DISALLOWED THE SAME ON THE GROUND THAT AS PER PROVI SIONS OF SECTION 10(33), ANY INCOME ARISING FROM THE TRANSFER OF A CAPITAL ASSET , BEING A UNIT OF UNIT SCHEME 1964 REFERRED TO IN SCHEDULE (1) TO THE UNIT TRUST OF IN DIA [AS TRANSFER OF UNDERTAKING AND REPEAL] ACT 2002, AND WHERE THE TRANSFER OF SUCH AS SET TAKES PLACE ON OR AFTER ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 2 01.04.2002 ARE EXEMPT. ACCORDING TO THE AO, IF INCO ME FROM A PARTICULAR SOURCE IS EXEMPT FROM TAXATION, LOSS FROM SUCH SOURCES CANNOT BE SET OFF AGAINST THE INCOME FROM ANOTHER SOURCE EVEN IF THE INCOME FROM THE OTH ER SOURCE IS ASSESSABLE UNDER THE SAME HEAD OF INCOME. FOR ARRIVING AT THE SAID D ECISION, THE AO ALSO RELIED ON THE DECISIONS IN THE CASES OF CIT VS S.S. THIAGARAJAN (1981) 129 ITR 115 (MAD), R ANJILAL RAIS VS. CIT (1965) 68 ITR 181 (ALL) . ACCORDINGLY, THE AO DISALLOWED THE LOSS ARISING ON TRANSFER OF UNITS OF US 1964 AS THE SAME CANNOT BE CONSIDERED FOR WORKING OUT THE NET LONG TERM CAPITAL GAINS FOR YEAR UNDER CONS IDERATION AND THUS THE SAME WAS IGNORED. ON APPEAL, THE LD.CIT(A) CONFIRMED THE DEC ISION OF THE AO. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BEFOR E US. 4. BEFORE US, THE LEARNED SENIOR COUNSEL FOR THE AS SESSEE HAS STATED THAT SECTION 10 DEALS WITH ONLY INCOME FOR THE PURPOSE OF GRANT OF TAX EXEMPTION FOR INCOME SPECIFICALLY EARNED/ARISING TO AN ASSESSEE AND DOES NOT INCLUDE ANY BASIS FOR DISALLOWANCE OF A LOSS UNLESS OTHERWISE SPECIFICALL Y INTENDED BY THE STATUTE AS FOUND IN OTHER PROVISIONS OF THE ACT NAMELY, EXPLANATION 2 IN PROVISO TO SECTION 64 OF THE ACT. IT HAS FURTHER BEEN ARGUED THAT THE CASE OF TH E ASSESSEE IS COVERED BY SECTION 10(35) AND NOT SECTION 10(33) OF THE INCOME-TAX ACT . ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, IF THE INCOME ARISING FRO M THE TRANSFER OF UNITS OF ADMINISTRATOR OF SPECIFIED UNDERTAKING IS EXCLUDED UNDER CLAUSE (B) BY THE PROVISO TO SECTION 10(35) OF THE ACT, THEN THE SAME WILL FORM PART OF THE TOTAL INCOME AND THEREFORE, THE QUESTION OF LOSS BEING EXCLUDED FROM THE COMPUTATION OF TOTAL INCOME WILL NOT ARISE FOR CONSIDERATION. MOREOVER, ASSUMIN G THAT THE CASE OF THE ASSESSEE IS COVERED BY BOTH THE PROVISION OF SECTIONS 10(33) AN D 10(35), THEN THE OPTION OF CHOOSING THE EXEMPTION WITHIN ANY OF THE PROVISION HAS TO BE GIVEN TO THE ASSESSEE CONSIDERING THE FACT THAT THESE PROVISIONS ARE NOT CHARGING PROVISIONS. SINCE SECTION 10(35) IS GIVEN EFFECT LATER IN POINT OF TIME AFTER THE SECTION 10(33) HAS BEEN GIVEN EFFECT, IN CASE WHEN BOTH THE SECTION ARE APPLICABL E TO THE CASE OF THE ASSESSEE, THE PROVISION WHICH HAS COME INTO EFFECT LATER SHALL PR EVAIL. WHEN THE STATUTE PROTECTS THE PERSONS WHO ARE EARNING THE INCOME, IT IS REDUN DANT TO SAY THAT IT DOES NOT PROTECT THE PERSONS WHO SUSTAINED LOSS. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FURTHER RELIED ON THE DECISION OF THE CALCUTTA HIGH COURT IN THE CASE OF ROYAL CALCUTTA ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 3 TURF CLUB VS. CIT (144 ITR 709) TO DRAW AN ANALOGY IN THE LINE OF THE PROVISIONS O F SECTION 10(27), TO SUBSTANTIATE THE PROPOSITION THA T THE CASE OF THE ASSESSEE IS COVERED BY THE PROVISO OF SECTION 10(35) OF THE ACT . BY RELYING ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. MAHENDRA MILLS (243 ITR 56) , THE LEARNED COUNSEL HAS ARGUED THAT A THING IS ALLOWED WHEN IT IS CLAIMED, THE PRIVILEGE CANNOT BE TO A DISADVANTAGE AND THE OPTION CANNOT BECOME AN O BLIGATION. BY STATING SO, THE LEARNED SENIOR COUNSEL HAS ARGUED THAT SECTION 10 I S A PRIVILEGE WHICH CANNOT BE USED FOR THE DISADVANTAGE AND THE OPTION AS SUCH CA NNOT BECOME AN OBLIGATION ON THE PART OF THE ASSESSEE. FURTHER, RELIANCE HAS BEE N PLACED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. J. H. GOTLA (156 ITR 323) IN SUPPORT OF THE PROPOSITION THAT IF STRICT AND LITERAL CONSTRUCTION OF A STATUTE LEADS TO AN ABSURD RESULT WHICH IS NOT INTENDED TO BE SERVED BY THE OBJECT OF THE LEGISLATION ASCERTAINED FROM THE SCHEME OF THE LEGISLATION, THEN, IF ANOTHER CON STRUCTION IS POSSIBLE APART FROM THE STRICT LITERAL CONSTRUCTION, THAT CONSTRUCTION SHOU LD BE PREFERRED TO THE STRICT AND LITERAL CONSTRUCTION. FURTHER, OUR ATTENTION HAS BE EN DRAWN TO THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. SCHRADER DUNCAN LIMITED VS. ACIT [150 TTJ 559 (MUM)] , WHEREIN SIMILAR ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE. HOWEVER, THE LEARNED SENIOR COUNSEL HAS ALLEGED THAT THE SAID DECISION H AS BEEN RENDERED OUT OF CERTAIN MISTAKES AND IF THE BENCH CONSIDERS THAT DEVIATION FROM THE SAID DECISION OF THE CO- ORDINATE BENCH OF THE TRIBUNAL IS NECESSARY, THE CA SE OF THE PRESENT ASSESSEE MAY BE REFERRED TO THE SPECIAL BENCH OF THE TRIBUNAL. 4.1 PER CONTRA, THE LD.DR HAS STATED THAT THE SCHEM E OF SECTION 10(33) AND SECTION 10(35) ARE DIFFERENT BY ARGUING THAT SECTIO N 10(33) COMES INTO OPERATION WHEN THE SOURCE/CAPITAL ASSET IS TRANSFERRED AND IN SUCH AN EVENT THE SOURCE OF INCOME DOES NOT EXIST. HOWEVER, SECTION 10(35) IS A PPLICABLE ONLY AS REGARDS THE INCOME ARISING FROM THE SOURCE/CAPITAL ASSET AND IN SUCH AN EVENT, THE SOURCE ACTUALLY EXIST. BY DRAWING THE SAID DISTINCTION, TH E LD.DR HAS JUSTIFIED THE ACTIONS OF THE AUTHORITIES BELOW THAT THE CASE OF THE ASSESSEE IS COVERED BY SECTION 10(33) OF THE ACT AGAINST THE CLAIM OF THE ASSESSEE THAT SECT ION 10(35) IS APPLICABLE TO ITS CASE. THE LD.DR HAS FURTHER STATED THAT SIMILAR ARGUMENTS HAVE BEEN DEALT WITH BY THE TRIBUNAL IN THE CASE OF M/S. SCHRADER DUNCAN LTD (SUPRA) AND HENCE THE ORDER OF THE ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 4 TRIBUNAL IN THE SAID CASE HAS TO BE FOLLOWED CONSID ERING THE FACT THAT SIMILAR ISSUES ARE INVOLVED IN THE PRESENT CASE OF THE ASSESSEE AL SO. THE LD.DR HAS FURTHER STATED THAT THE CASES RELIED ON BY THE ASSESSEE ARE FACTUA LLY DISTINGUISHABLE. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD. THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SCHRADER DUNCAN LTD (SUPRA) , WHILE DECIDING A SIMILAR ISSUE HAS HELD THAT THE LO NG TERM CAPITAL LOSS IN RESPECT OF THE UNITS OF UTI UNIT SCHEME 1964 CANNOT BE CONSIDE RED FOR WORKING OUT THE NET LONG TERM CAPITAL GAINS. THE RELEVANT DISCUSSIONS O N THE ISSUE IN THE SAID ORDER OF THE TRIBUNAL ARE EXTRACTED HEREUNDER: 12. BEFORE WE PROCEED TO NARRATE THE CONTENTIONS ON BEH ALF OF THE ASSESSEE, A BRIEF HISTORY ABOUT US 64 SCHEME HAS TO BE GIVEN. THE UNI T TRUST OF INDIA (UTI) IS THE LARGEST MUTUAL FUND IN THE COUNTRY CREATED IN 1964 THROUGH AN ACT OF PARLIAMENT. MUTUAL FUNDS ARE FINANCIAL INSTITUTIONS THAT INVEST PEOPLE'S MONEY IN VARIOUS SCHEMES, GIVING A 'GUARANTEED' RETURN TO THE INVESTOR. THE U TI (OF WHICH THE UNIT SCHEME 1964 (US-64 SCHEME) IS THE LARGEST) WAS SET-UP SPECIFICA LLY TO CHANNEL SMALL SAVINGS OF CITIZENS INTO INVESTMENTS GIVING RELATIVELY LARGE R ETURNS/INTEREST. THE US-64 SCHEME HAD 2 CRORE INVESTORS, THE BULK OF WHOM WERE SMALL SAVERS, RETIRED PEOPLE, WIDOWS AND PENSIONERS. BESIDES THE US-64 THE UTI MANAGED 8 7 OTHER SCHEMES GIVING INVESTORS VARIOUS OPTIONS. LIBERALISATION OF THE EC ONOMY IMMEDIATELY LED TO THE LIBERALISATION OF THE UTI, THROWING IT TO THE MERCY OF THE STOCK MARKET. IN 1992, THE US-64 SCHEME WAS CHANGED FROM A DEBT-BASED FUND TO ONE LINKED TO EQUITY. ALL GOVERNMENT NOMINEES WERE REMOVED FROM THE BOARD OF THE UTI. THE US-64 DOES NOT COME UNDER SEBI REGULATIONS, ITS INVESTMENT DETAILS ARE KEPT SECRET (EVEN DEPOSITORS CANNOT KNOW WHERE THEIR FUNDS ARE BEING PARKED) AND THE CHAIRMAN HAD POWERS TO PERSONALLY DECIDE AN INVESTMENT UP TO A HUGE RS. 40 CRORES. SMALL INVESTOR'S FUNDS WERE USED IN NOT SO DILIGENT MANNER. WITH KNOWLEDGE THAT THE UTI WAS IN A STATE OF COLLAPSE, SOME CORPORATES KNEW THAT IT WAS TIME TO WITHDRAW THEIR FUNDS. ON JULY, 4TH, 2001 UTI FREEZED PURCHASE AND SALE OF UTI SHAR ES INCLUDING US 64 SCHEME. TWO MONTH PRIOR TO THE FREEZING OF DEALINGS IN UTI SHAR ES, HUGE SUMS WERE REDEEMED BY CORPORATE INVESTORS AT RE-PURCHASE PRICE OF RS. 14. 20 PER SHARE (FACE VALUE RS. 10) WHEN IN FACT ITS ACTUAL VALUE (NAV NET ASSET VALU E) WAS NOT MORE THAN RS. 8. AS A RESULT UTI'S SMALL INVESTORS LOST HEAVILY. AFTER FR EEZING OF PURCHASE AND SALE OF UTI SHARES, UTI DECLARED A DIVIDEND OF 7% (10% ON FACE- VALUE), WHICH WAS EVEN LOWER THAN THE INTERESTS OF THE BANKS AND POST OFFICE SAV ING SCHEMES. SUCH FREEZING OF LEGALLY HELD SHARES WAS UNHEARD OF. THE GOVERNMENT FINALLY ANNOUNCED A COMPREHENSIVE BAILOUT PACKAGE FOR THE BELEAGUERED U NIT TRUST OF INDIA BY PROMULGATING. THE UNIT TRUST OF INDIA (TRANSFER OF UNDERTAKING AND REPEAL) ORDINANCE, 2002 (5 OF 2002) IN SEPTEMBER, 2002. ON 29TH OCTOBER, 2002, THE UNIT TRUST OF INDIA (TRANSFER OF UNDERTAKING AND REPEAL) ACT, 2002 (58 OF 2002) (HEREINAFTER REFERRED TO AS UTI (TUR) ACT) WAS PASS ED. BY THIS ACT UTI WAS TO BE SPLIT INTO TWO. SOME OF THE SCHEMES LIKE US 64 WERE TRANS FERRED TO SPECIFIED UNDERTAKING (LATER KNOWN AS UTI TRUSTEE CO. PVT. LTD.) AND OTHE R SCHEMES WERE TRANSFERRED TO SPECIFIED COMPANY (LATER KNOWN AS UTI ASSET MANAGEM ENT CO. PVT. LTD.). THE EFFECTIVE DATE OF TRANSFER WAS 1.2.2003. ON 11TH MA RCH, 2003, ADMINISTRATOR OF THE SPECIFIED UNDERTAKING OF UTI WHO TOOK OVER US 64 SC HEME OF UTI UNDER UTI (TUR) ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 5 ACT, ANNOUNCED A SCHEME WHEREBY THE INVESTORS WERE GIVEN AN OPTION EITHER TO REDEEM THEIR UNITS OR OPT TO GET 6.75% P.A. TAX FRE E BONDS REDEEMABLE AFTER 5 YEARS. THE REDEMPTION OPTION TO INVESTORS WHO HELD UNITS O F THE VALUE OF UPTO RS. 5000 HELD BY ONE INVESTOR WAS AT RS. 12 PER UNIT AND INVESTOR S WHO HELD UNITS OF THE VALUE OF MORE THAN RS. 5000 HELD BY ONE INVESTOR HAD THE OPT ION TO REDEEM THEIR UNITS AT RS. 10/- PER UNIT. THOSE WHO DID NOT EXERCISE THE OPTIO N FOR REDEMPTION HAD TO COMPULSORILY ACCEPT 6.75% TAX-FREE BONDS REPAYABLE AT THE END OF 5 YEARS IN LIEU OF THEIR EXISTING HOLDING OF UNITS. THUS W.E.F 1-6-200 3 US 64 SCHEME BECAME A CLOSE ENDED SCHEME IN THE FORM OF 6.75% TAX-FREE BONDS. T HIS IS THE SCHEME UNDER WHICH THE UNITS OF US 64 SCHEME HELD BY THE ASSESSEE GOT CONVERTED INTO 6.75% TAX FREE BONDS REPAYABLE AFTER 5 YEARS FROM 1.6.2003. 13. IN TUNE WITH THE AFORESAID BAILOUT PACKAGE, THE PAR LIAMENT INTRODUCED PROVISIONS IN THE INCOME TAX ACT, 1961 (THE ACT) WHEREBY TAX C ONCESSIONS WERE EXTENDED TO UNIT HOLDERS OF US 64 SCHEME. THESE PROVISIONS WERE AS FOLLOWS: 14. THE FINANCE ACT, 2003 INTRODUCED SEC. 10(33) W.E.F. 1-4-2003 I.E. APPLICABLE FOR AY 03-04. (33) ANY INCOME ARISING FROM THE TRANSFER OF A CAP ITAL ASSET, BEING A UNIT OF THE UNIT SCHEME, 1964 REFERRED TO IN SCHEDULE I TO THE UNIT TRUST OF INDIA (TRANSFER OF UNDERTAKING AND REPEAL) ACT, 2002 (58 OF 2002) AND WHERE THE TRANSFER OF SUCH ASSET TAKES PLACE ON OR AFTER THE 1ST DAY OF APRIL, 2002; 15. BY THE SAME FINANCE ACT, 2003, SEC. 10(34) AND (35 ) WERE INTRODUCED BUT TO TAKE EFFECT FROM 1.4.2004. I.E. APPLICABLE FOR AY 04-05: '(34) ANY INCOME BY WAY OF DIVIDENDS REFERRED TO IN SECTION 115-O; (35) ANY INCOME BY WAY OF, (A) INCOME RECEIVED IN RESPECT OF THE UNITS OF A M UTUAL FUND SPECIFIED UNDER CLAUSE (23D); OR (B) INCOME RECEIVED IN RESPECT OF UNITS FROM THE A DMINISTRATOR OF THE SPECIFIED UNDERTAKING; OR (C) INCOME RECEIVED IN RESPECT OF UNITS FROM THE S PECIFIED COMPANY: PROVIDED THAT THIS CLAUSE SHALL NOT APPLY TO ANY INC OME ARISING FROM TRANSFER OF UNITS OF THE ADMINISTRATOR OF THE SPECIFIED UNDERTAKING O R OF THE SPECIFIED COMPANY OR OF A MUTUAL FUND, AS THE CASE MAY BE. EXPLANATION.FOR T HE PURPOSES OF THIS CLAUSE, (A) 'ADMINISTRATOR' MEANS THE ADMINISTRATOR AS REF ERRED TO IN CLAUSE (A) OF SECTION 2 OF THE UNIT TRUST OF INDIA (TRANSFER OF U NDERTAKING AND REPEAL) ACT, 2002 (58 OF 2002); (B) 'SPECIFIED COMPANY' MEANS A COMPANY AS REFERRE D TO IN CLAUSE (H) OF SECTION 2 OF THE UNIT TRUST OF INDIA (TRANSFER OF U NDERTAKING AND REPEAL) ACT, 2002 (58 OF 2002);' ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 6 16. INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOM E UNDER CHAPTER-III OF THE ACT, DO NOT ENTER THE COMPUTATION OF TOTAL INCOME A T ALL. SEC. 4 OF THE ACT CREATES CHARGE OF INCOME-TAX AND IT PROVIDES THAT WHERE 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 THOSE RATES SHALL BE CHARGED FOR THAT YEAR IN ACCORDANCE WITH, AND SUBJECT TO THE PROVISIONS (INCLUDING PROVISIONS FOR THE LEVY O F ADDITIONAL INCOME-TAX) OF THIS ACT IN RESPECT OF THE TOTAL INCOME OF THE PREVIOUS YEAR OF EVERY PERSON. THE CHARGE OF TAX IS THUS ON TOTAL INCOME. SEC. 2(45) DEFINES TOTAL INCO ME TO MEAN TOTAL AMOUNT OF INCOME REFERRED TO IN SEC. 5, COMPUTED IN THE MANNER LAID DOWN IN THIS ACT. CHAPTER-II OF THE ACT, FROM SECTION 4 TO 9 DEAL WITH BASIS OF CHARGE. CHAPTER-III OF THE ACT, DEALS WITH INCOME WHICH DO NOT FORM PART OF TOTAL INCOME AND A RE CONTAINED IN SECT. 10 TO 13-B OF THE ACT. CHAPTER IV DEALS WITH THE COMPUTATION O F TOTAL INCOME. FIRSTLY INCOME IS CATEGORIZED UNDER VARIOUS HEADS OF INCOME. THIS IS LAID DOWN IN SECTION 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 THE FOLLOWING HEADS OF INCOME - SALARIES, INC OME FROM HOUSE PROPERTY, PROFITS 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 THIS IS CONTAINED IN SECT ION 60 TO 65 OF THE ACT. CHAPTER-VI (CONTAINING SEC. 66 TO 80) THEN LAYS DOWN PROVISION S REGARDING AGGREGATION OF INCOME AND SET OFF OR CARRY FORWARD OF LOSS. SECTION 66 RE ADS AS UNDER:- 'TOTAL INCOME - IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE, THERE SHALL BE INCLUDED ALL INCOME ON WHICH NO INCOME-TAX IS PAYAB LE UNDER CHAPTER VII.' THE PROVISIONS OF SECTION 66 ARE NOT APPLICABLE TO INCOMES WHICH ARE ABSOLUTELY EXEMPT FROM TAX AS PER SECTION 10, SECTION 11 ETC., FALLING UNDER CHAPTER III. THIS POSITION IS MADE CLEAR BY S. 66 ITSELF AS IT SPEAKS ONLY OF 'INCOMES ON WHICH TAX IS NOT PAYABLE' AND SIMILAR WORDS ARE USED IN CHAPTER VII ONLY THUS LEAVING OUT BY IMPLICATION INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME AT ALL AS PER CHAPTER III FROM THE SCOPE OF S. 66. 17. FROM THE CHARGING PROVISIONS OF THE ACT, IT IS CLE AR THAT BOTH PROFIT AS WELL AS LOSS WHICH IS NEGATIVE PROFIT MUST ENTER INTO COMPUTATIO N, WHEREVER IT BECOMES MATERIAL. THE CHARGE IS ON TOTAL INCOME OF THE ASSESSEE. SEC. 2(45) DEFINES TOTAL INCOME TO MEAN TOTAL AMOUNT OF INCOME REFERRED TO IN SEC. 5, COMPUTED IN THE MANNER LAID DOWN IN THIS ACT. AN INCOME IN ORDER TO COME WITHIN THE PURVIEW OF THAT DEFINITION MUST SATISFY TWO CONDITIONS. FIRSTLY, IT MUST COMPR ISE THE 'TOTAL AMOUNT OF INCOME, PROFITS AND GAINS. SECONDLY, IT MUST BE 'COMPUTED I N THE MANNER LAID DOWN IN THE ACT'. IF EITHER OF THESE CONDITIONS FAILS, THE INCO ME WILL NOT BE A PART OF THE TOTAL INCOME THAT CAN BE BROUGHT TO CHARGE. IF INCOME INC LUDES LOSS AND IF INCOME ON TRANSFER OF UNITS OF US 64 SCHEME DO NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT BY VIRTUE OF PROVISIONS OF SEC. 10(33) OF THE ACT C ONTAINED IN CHAPTER III OF THE ACT, THEN NEITHER THE GAIN NOR LOSS ON TRANSFER WOULD BE CONSIDERED FOR COMPUTATION OF TOTAL INCOME. THIS POSITION IS ACCEPTED BY THE LEAR NED COUNSEL FOR THE ASSESSEE BUT HIS ENDEAVOR WAS ONLY TO POINT OUT THAT THE ABOVE PROPO SITION MAY NOT BE APPLICABLE IN ALL SITUATIONS. THE LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT SECTION 10(33) OF THE ACT EXCLUDES ONLY 'INCOME' FROM THE TRANSFER OF AN A CAPITAL ASSET BEING THE UNIT OF US 64 AND REFERRED TO SCHEDULE-1 OF THE UTI (TUR) A CT, WHERE THE TRANSFER OF SUCH ASSETS TAKE PLACE ON OR AFTER THE FIRST DAY OF APRI L, 2002. IT WAS SUBMITTED BY HIM THAT THE WORD 'INCOME' NO DOUBT INCLUDES 'LOSS'. IT WAS HIS SUBMISSION THAT THE ABOVE STATEMENT MAY NOT TRUE IN ALL CIRCUMSTANCES AND THE QUESTION WHETHER THE EXPRESSION ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 7 'INCOME' USED IN SEC. 10(33) OF THE ACT ALSO INCLUD ES LOSS SO AS TO EXCLUDE LOSS FROM ENTERING THE COMPUTATION OF TOTAL INCOME, HAS TO BE DECIDED KEEPING IN VIEW THE PURPOSE FOR WHICH A PARTICULAR INCOME IS EXCLUDED F ROM THE COMPUTATION OF TOTAL INCOME. IN OTHER WORDS IT WAS HIS SUBMISSION THAT T HE WORD INCOME INCLUDES LOSS BUT THIS STATEMENT IS NOT ALWAYS TRUE AND ONE HAS TO SE E THE INTENTION OF A PARTICULAR PROVISION WHICH EXCLUDES CERTAIN INCOME FROM THE CO MPUTATION OF TOTAL INCOME. IN THIS REGARD THE LD. COUNSEL FOR THE ASSESSEE PLACED RELI ANCE ON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF ROYAL CALCUTTA T URF CLUB V. CIT [1983] 144 ITR 709/12 TAXMAN 133. IN THE AFORESAID DECISION THE QU ESTION AROSE FOR CONSIDERATION IN THE CONTEXT OF SECTION 10(27) OF THE ACT. THE ASSES SEE IN THE AFORESAID CASE HAD LOSS UNDER THE HEAD BROODMARES ACCOUNT AND PIG ACCOUNT ( A BUSINESS OF LIVESTOCK BREEDING). THE ASSESSEE SOUGHT TO SET OFF THE LOSS AS AFORESAID AGAINST ITS TAXABLE BUSINESS INCOME. ADMITTEDLY UNDER SECTION 10(27) OF THE ACT ANY INCOME DERIVED FROM A BUSINESS OR LIVESTOCK BREEDING OR POULTRY OR DAIR Y FARMING WAS NOT INCLUDED IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF AN Y PERSON. THE QUESTION BEFORE THE HON'BLE CALCUTTA HIGH COURT WAS REGARDING THE CORRE CTNESS OF THE CLAIM MADE BY THE ASSESSEE WHICH WAS REJECTED BY THE REVENUE AUTHORIT IES AS WELL AS THE TRIBUNAL. THE HON'BLE CALCUTTA HIGH COURT HELD THAT CL. (27) OF S . 10 EXCLUDES IN EXPRESS TERMS ONLY 'ANY INCOME DERIVED FROM A BUSINESS OF LIVESTOCK BR EEDING OR POULTRY OR DAIRY FARMING'. IT DOES NOT EXCLUDE THE BUSINESS OF LIVES TOCK BREEDING OR POULTRY OR DAIRY FARMING FROM THE OPERATION OF THE ACT AND THEREFORE LOSS FROM THE SAID BUSINESS CAN BE SET OFF AGAINST OTHER BUSINESS INCOME. 18. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE PRESENT CASE WHAT IS EXCLUDED IS INCOME ARISING ON TRANSFER OF UNITS OF US 64 SCHEME AND NOT THE SOURCE ITSELF AND THEREFORE WHEN THERE IS A LOSS ON TRANSF ER OF UNITS OF US 64 SCHEME, THE ASSESSEE SHOULD BE ENTITLED TO CLAIM THE SAME FOR C ARRY FORWARD FOR SET OFF IN ACCORDANCE WITH LAW IN SUBSEQUENT ASSESSMENT YEARS. IN THIS REGARD LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNDER SECTION 74 OF THE ACT THERE IS NO BAR TO SET OFF OF LOSS ON SALE OF UNIT OF US 64. SIMILARLY IT WAS ALS O SUBMITTED THAT HAD IT BEEN THE INTENTION OF THE LEGISLATURE TO EXCLUDE LOSS AND CA RRY FORWARD AND SET OFF OF LOSS ON TRANSFER OF US 64 UNITS, THE DEFINITION OF CAPITAL ASSET WOULD HAVE BEEN AMENDED AND US 64 UNITS WOULD HAVE BEEN EXCLUDED FROM THE DEFIN ITION OF CAPITAL ASSET. ALTERNATIVELY UNDER SECTION 47 THE LEGISLATURE COUL D HAVE EXCLUDED CONVERSION OF US 64 UNITS INTO 6.75% TAX FREE BONDS AS NOT AMOUNTING TO A TRANSFER. IN THIS REGARD IT WAS ALSO POINTED OUT THAT UNDER SECTION 47(X) OF TH E ACT CONVERSION OF BONDS OR DEBENTURES, STOCK OR DEPOSIT CERTIFICATE IN ANY FOR M OF A COMPANY INTO SHARES OR DEBENTURES OF THAT COMPANY ARE EXCLUDED. IN THE ABS ENCE OF SUCH PROVISIONS, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE L OSS ARISING ON CONVERSION OF US64 UNITS INTO 6.75% TAX FREE BONDS WILL NOT FALL WITHI N THE PURVIEW OF SEC. 10(33) OF THE ACT. POINTING OUT TO THE HISTORY OF US 64 IT WAS SU BMITTED THAT THE INVESTORS BURNT THEIR FINGERS AND THE REVENUE BY NOT ALLOWING THE L OSS ON CONVERSION IS SEEKING TO BURN THEIR HANDS. IT WAS SUBMITTED THAT UNDER SECTI ON 10(22B) OF THE ACT THE LEGISLATOR HAS SPECIFICALLY EXCLUDED INCOME FROM TH E BUSINESS OF NEWS AGENCY ITSELF WHEREAS UNDER SECTION 10(33) ONLY INCOME (IN THE FO RM OF CAPITAL GAIN) ON TRANSFER OF US 64 UNITS HAVE BEEN EXCLUDED. THE LD. COUNSEL FOR THE ASSESSEE THUS PRAYED THAT LOSS ON SALE OF US 64 SHOULD BE ALLOWED TO BE CARRY FORWARD FOR SET OFF IN SUBSEQUENT ASSESSMENT YEARS IN ACCORDANCE WITH LAW. ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 8 19. ALTERNATIVELY IT WAS SUBMITTED THAT UNDER SECTION 10(35)(B) OF THE ACT WHICH WAS INTRODUCED W.E.F. 1/4/2004, INCOME RECEIVED IN RESP ECT OF UNITS FROM THE ADMINISTRATOR OF THE SPECIFIED UNDERTAKING IS EXCLU DED IN THE COMPUTATION OF TOTAL INCOME. HOWEVER, PROVISO TO SECTION 10(35) WAS SPEC IFICALLY EXCLUDES INCOME ARISING FROM TRANSFER OF UNITS OF ADMINISTRATOR. IT WAS HIS SUBMISSION THAT SECTION 10(35) ALSO APPLIES TO TRANSFER OF UNITS OF US 64 SCHEME W.E.F. 1/4/2004. SINCE THE TRANSFER OF UNITS OF US 64 TOOK PLACE IN THE PREVIOUS YEAR RELE VANT TO ASSESSMENT YEAR 04-05, THE PROVISIONS OF SEC. 10(35) OF THE ACT WOULD ALONE AP PLY. HIS SUBMISSION WAS THAT IF TWO PROVISIONS ARE APPLICABLE THAT THE ONE WHICH WILL L EAVE THE ASSESSEE WITH LIGHTER TAX BURDEN SHOULD BE APPLIED AND IN THIS REGARD RELIANC E WAS PLACED ON THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. BOSOTTO BROS. LTD. [1940] 8 ITR 41. THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSES SEE WAS THAT SINCE INCOME ON TRANSFER OF UNITS OF THE ADMINISTRATOR OF THE SPECI FIED UNDERTAKING IS NOT EXCLUDED IN THE COMPUTATION OF TOTAL INCOME, THE LOSS ON TRANSF ER OF SUCH UNITS SHOULD BE ALLOWED. 20. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. WE WILL FIRST TAKE UP FOR CONSIDERATION AS TO WHETHER SEC. 10(33) OF THE ACT OR SEC. 10(35) OF THE ACT WILL APPLY. AS WE HAVE ALREADY SEEN UNDE R CLAUSE (B) TO SEC. 10(35) OF THE ACT, INCOME BY WAY OF INCOME RECEIVED IN RESPECT OF UNITS FROM THE ADMINISTRATOR OF THE SPECIFIED UNDERTAKING WILL NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. THE PROVISO TO SEC. 10(35) HOWEVER MAKES IT CLEAR THAT THE INCOME ARISING FROM TRANSFER OF UNIT OF THE ADMINISTRATOR OF THE SPECIFIED UNDER TAKING IS NOT COVERED BY CLAUSE (B) OF SEC. 10(35) OF THE ACT. THE STAND OF THE ASSESSE E IS THAT IF INCOME ARISING FROM TRANSFER OF UNITS OF ADMINISTRATOR OF THE SPECIFIED UNDERTAKING IS EXCLUDED UNDER CLAUSE (B) BY THE PROVISO TO SEC. 10(35) OF THE ACT , THEN THE SAME WILL FORM PART OF THE TOTAL INCOME AND THEREFORE THE QUESTION OF LOSS ALSO BEING EXCLUDED FROM THE COMPUTATION OF TOTAL INCOME WILL NOT ARISE FOR CONS IDERATION. WE HAVE ALREADY SEEN THE HISTORY OF US 64 SCHEME. ON JULY, 4TH, 2001 UTI FREEZED PURCHASE AND SALE OF UTI SHARES INCLUDING US 64 SCHEME. ON 15TH JULY, 20 01 UTI ANNOUNCED REPURCHASE BY INVESTORS UPTO 3,000 UNITS BETWEEN AUGUST, 2001 AND MAY, 2003. THE REPURCHASE PRICE IN AUGUST WAS FIXED AT RS. 10 PER UNIT TO BE INCREASED BY 10 PAISE EVERY MONTH. ON 27TH DECEMBER, 2001 UTI ANNOUNCED THAT IT WOULD REDEEM 5,000 UNITS AS AGAINST 3,000 UNITS ANNOUNCED EARLIER AT EITHER THE REPURCH ASE PRICE OR THE NAV WHICHEVER WAS HIGHER. THE GOVERNMENT FINALLY ANNOUNCED A COMP REHENSIVE BAILOUT PACKAGE FOR THE BELEAGUERED UNIT TRUST OF INDIA BY PROMULGATING THE UNIT TRUST OF INDIA (TRANSFER OF UNDERTAKING AND REPEAL) ORDINANCE, 2002 (5 OF 20 02) IN SEPTEMBER, 2002. ON 29TH OCTOBER, 2002, UTI (TUR) ACT) WAS PASSED. BY T HIS ACT UTI WAS TO BE SPLIT INTO TWO. SOME OF THE SCHEMES LIKE US 64 WERE TRANSFERRE D TO SPECIFIED UNDERTAKING (LATER KNOWN AS UTI TRUSTEE CO. PVT. LTD.) AND OTHER SCHEM ES WERE TRANSFERRED TO SPECIFIED COMPANY (LATER KNOWN AS UTI ASSET MANAGEMENT CO. PV T. LTD.). THE EFFECTIVE DATE OF TRANSFER WAS 1.2.2003. ON 11TH MARCH, 2003, ADMINIS TRATOR OF THE SPECIFIED UNDERTAKING OF UTI WHO TOOK OVER US 64 SCHEME OF UT I UNDER UTI (TUR) ACT, ANNOUNCED A SCHEME WHEREBY THE INVESTORS WERE GIVEN AN OPTION EITHER TO REDEEM THEIR UNITS OR OPT TO GET 6.75% P.A. TAX FREE BONDS REDEEMABLE AFTER 5 YEARS. THE REDEMPTION OPTION TO INVESTORS WHO HELD UNITS OF TH E VALUE OF UPTO RS. 5000 HELD BY ONE INVESTOR WAS AT RS. 12 PER UNIT AND INVESTORS W HO HELD UNITS OF THE VALUE OF MORE THAN RS. 5000 HELD BY ONE INVESTOR HAD THE OPTION T O REDEEM THEIR UNITS AT RS. 10/- PER UNIT. THOSE WHO DID NOT EXERCISE THE OPTION FOR REDEMPTION HAD TO COMPULSORILY ACCEPT 6.75% TAX-FREE BONDS REPAYABLE AT THE END OF 5 YEARS IN LIEU OF THEIR EXISTING HOLDING OF UNITS. THUS ON AND FROM 1-6-2003, UNITS OF US 64 SCHEME WHICH REMAINED WITHOUT BEING REDEEMED BY THE HOLDERS BECAME 6.75% TAX FREE BONDS AND THEIR NAV BECAME INSIGNIFICANT. ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 9 21. IT BECAME NECESSARY TO PROTECT INVESTORS WHO SOLD UNITS AFTER 1.4.2002 TILL REDEMPTION OF THE US 64 UNITS PURSUANT TO THE SCHEM E REFERRED TO ABOVE. IT WAS TO GIVE RELIEF TO UNIT HOLDERS OF US 64 WHO OPTION FOR REDEMPTION DURING THE PERIOD FROM 1.4.2002 TILL REDEMPTION UNDER THE SCHEME PURSUANT TO THE UT (TUR) ACT, I.E., 31.5.2003, THAT SEC. 10(33) OF THE ACT WAS BROUGHT IN THE STATUTE BOOK. SEC. 10(33) IS APPLICABLE ONLY TO UNITS BEING UNITS OF US64 SCHEME . AFTER REDEMPTION OR CONVERSION OF UNITS OF US64 SCHEME PURSUANT TO THE UTI (TUR) A CT, UNITS OF UNIT SCHEME 1964 VIRTUALLY BECAME EXTINCT AND THE QUESTION OF GIVING EXEMPTION FROM CAPITAL GAIN TAX DID NOT ARISE FOR CONSIDERATION AT ALL AFTER 31.5.2 003. BECAUSE THE TRANSFER IN THE CASE OF THE ASSESSEE OF UNITS OF US 1964 SCHEME BY CONVE RSION TO 6.75% TAX FREE BONDS IS CLAIMED TO HAVE TAKEN PLACE ON 31.5.2003, THE CASE OF THE ASSESSEE FALLS ONLY U/S. 10(33) OF THE ACT. 22. THERE WERE OTHER UNIT SCHEMES WHICH WERE TAKEN OVE R BY THE SPECIFIED UNDERTAKING UNDER THE UTI (TUR) ACT. THEY WERE NOT COVERED BY SEC. 10(33) OF THE ACT. SEC. 10(35) OF THE ACT THEREFORE SPECIFICALLY EXEMPTS W.E.F. 1-4-2004, ONLY INCOME RECEIVED IN RESPECT OF UNITS FROM THE ADMINI STRATOR OF THE SPECIFIED UNDERTAKING. THE PROVISO TO SEC. 10(35) OF THE ACT CANNOT COVER UNITS OF US 1964 SCHEME BECAUSE AS ON 1-4-2004 UNITS OF US 1964 SCHE ME WERE NOT IN EXISTENCE AS THEY BECAME 6.75% TAX FREE BONDS OR WERE REDEEMED A S EARLY AS 31.5.2003. 23. FOR THE REASONS GIVEN ABOVE, WE HOLD THAT PROVISIO NS OF SEC. 10(33) OF THE ACT WOULD BE THE PROVISION APPLICABLE TO ASSESS THE CLA IM OF THE ASSESSEE FOR ITS CLAIM FOR RIGHT TO DETERMINE THE LOSS ON CONVERSION OF THE UN ITS OF US 1964 INTO 6.75% TAX FREE BONDS AND THE CLAIM TO CARRY FORWARD SUCH LOSS FOR SET OFF IN SUBSEQUENT ASSESSMENT YEARS IN ACCORDANCE WITH LAW AND NOT SEC. 10(35) OF THE ACT. 24. THERE IS ANOTHER REASON TO HOLD THAT PROVISIONS OF SEC. 10(35) OF THE ACT DO NOT APPLY TO THE FACTS OF THE PRESENT CASE. SEC. 10(35) CAME INTO EFFECT FROM 1-4-2004. THE TRANSFER IN THE PRESENT CASE ACCORDING TO THE A SSESSEE TOOK PLACE ON 31.5.2003 WHEN UNITS OF US 64 SCHEME WERE CONVERTED INTO 6.75 % TAX FREE BONDS. AS FAR AS CAPITAL GAINS ARE CONCERNED, THE LAW AS ON THE DATE OF TRANSFER WOULD ONLY APPLY. CAPITAL GAINS ARE NOT INCOME WHICH ACCRUES FROM DAY -TO-DAY FOR A SPELL OF PERIOD BUT ARISE AT A FIXED POINT OF TIME, NAMELY, THE DATE OF TRANSFER. THIS IS UNLIKE THE INCOME ARISING OR ACCRUING AS PROFITS AND GAINS OF A BUSIN ESS TO BE COMPUTED IN TERMS OF SECTION 28 OF THE INCOME-TAX ACT, 1961, WHERE THE P ROFITS AND GAINS CAN ONLY BE SAID TO ACCRUE AT THE END OF THE PREVIOUS YEAR WHEN THE RESULT OF THE WORKING OF BUSINESS FOR THE ENTIRE PERIOD IS KNOWN. THE TAXABLE EVENT W HICH ATTRACTED LIABILITY TO TAX WAS THE TRANSFER OF IMMOVABLE PROPERTY AS A RESULT OF W HICH THE INCOME IN THE NATURE OF CAPITAL GAIN AROSE DURING THE PREVIOUS YEAR. WHEN T HE TAXABLE EVENT OCCURRED, NAMELY, THE TRANSFER OF THE CAPITAL ASSETS IN QUEST ION, THE PROVISIONS OF SEC. 10(33) OF THE ACT ALONE EXISTED. 25. HAVING HELD THAT THE APPLICABLE PROVISIONS ARE SEC . 10(33) OF THE ACT, WE SHALL NOW EXAMINE THE CLAIM OF THE ASSESSEE FOR DETERMINA TION/ASSESSMENT OF THE LOSS. 26. THE MAIN ARGUMENT OF THE LEARNED COUNSEL FOR THE A SSESSEE IS BASED ON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF ROYAL CALCUTTA TURF CLUB (SUPRA). THE REFERENCE BEFORE THE HON'BLE COURT REL ATED TO ASSESSMENT YEAR 1965-66 AND AROSE ON THE FOLLOWING FACTS. THE ASSESSEE, M/S . ROYAL CALCUTTA TURF CLUB, CLAIMED A LOSS OF RS. 74,065 IN BROODMARES ACCOUNT AND RS. 19,918 IN PIG ACCOUNT. THE ITO, HOWEVER, DID NOT ALLOW THESE LOSSES BECAUS E ACCORDING TO HIM THE INCOMES ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 10 FROM THESE TWO HEADS WERE EXEMPT UNDER S. 10(27) OF THE I.T. ACT, 1961. THE APPELLATE AUTHORITIES CONFIRMED THE ORDER OF THE IT O. SECTION 10 STIPULATES THAT IN COMPUTING THE TOTAL INCOME OF THE PREVIOUS YEAR OF ANY PERSON ANY INCOME FALLING WITHIN THE DIFFERENT CATEGORIES MENTIONED IN DIFFER ENT CLAUSES OF S.10 SHOULD NOT BE INCLUDED AND SUB-S. (27) PROVIDED FOR NON-INCLUSION OF ' ANY INCOME DERIVED FROM A BUSINESS OF LIVESTOCK BREEDING OR POULTRY OR DAIRY FARMING '. THE HON'BLE CALCUTTA HIGH COURT ACCEPTED THE PLEA OF THE ASSESSEE. RELIANCE H AS BEEN PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE FOLLOWING OBSERVATI ONS OF THE HON'BLE COURT: 'UNDER THE I.T. ACT, THERE ARE CERTAIN INCOMES WHIC H DO NOT ENTER INTO THE COMPUTATION OF THE TOTAL INCOME AT ALL. IN THIS CON NECTION WE HAVE TO BEAR IN MIND THE SCHEME OF THE CHARGING SECTION WHICH PROVIDES T HAT THE INCOMES SHALL BE CHARGED AND S. 4 OF THE ACT PROVIDES THAT THE CENTRAL ACT E NACTS THAT THE INCOMES SHALL BE CHARGED FOR ANY ASSESSMENT YEAR AND IN ACCORDANCE W ITH AND SUBJECT TO THE PROVISIONS OF THE 1961 ACT IN RESPECT OF THE TOTAL INCOME OF THE PREVIOUS YEAR OR YEARS OR WHATEVER THE CASE MAY BE. THE SCHEME OF 'T OTAL INCOME' HAS BEEN EXPLAINED BY S. 5 OF THE ACT WHICH PROVIDES THAT SU BJECT TO THE PROVISIONS OF THE ACT, THE TOTAL INCOME OF THE PREVIOUS YEAR OF A PERSON W HO IS A RESIDENT INCLUDES ALL INCOME FROM WHATEVER SOURCE IT IS DERIVED. IN COMPU TING THE TOTAL INCOME, CERTAIN INCOMES ARE NOT INCLUDED UNDER S. 10 OF THE ACT. IT DEPENDS ON THE PARTICULAR CASE WHERE CERTAIN INCOME, IN RESPECT OF WHICH THE ACT I S MADE INAPPLICABLE TO THE SCHEME OF THE ACT, AND IN SUCH A CASE, THE PROFIT AND LOSS RESULTING FROM SUCH A SOURCE DO NOT ENTER INTO THE COMPUTATION AT ALL. BUT THERE ARE OT HER SOURCES WHICH FOR CERTAIN ECONOMIC REASONS ARE NOT INCLUDED OR EXCLUDED BY TH E WILL OF THE LEGISLATURE. IN SUCH A CASE WE MUST LOOK TO THE SPECIFIC EXCLUSION THAT HAS BEEN MADE. THE QUESTION IS IN THIS CASE WHETHER S. 10(27) IS A SOURCE WHICH DOES NOT ENTER INTO THE COMPUTATION AT ALL OR IS A SOURCE THE INCOME IN RESPECT OF WHICH I S EXCLUDED IN THE COMPUTATION OF TOTAL INCOME.' [EMPHASIS SUPPLIED] 27. THE HON'BLE CALCUTTA HIGH COURT PRINCIPALLY RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. KARAMCHAND PREM CHAND LTD. [1960] 40 ITR 106. THE FACTS OF THE CASE WERE THAT THE ASSESSEE W HICH HELD THE MANAGING AGENCY OF A COMPANY IN BRITISH INDIA AND ALSO CARRIED ON A PHARMACEUTICAL BUSINESS IN THE NATIVE STATE OF BARODA OUTSIDE BRITISH INDIA, DURIN G THE RELEVANT CHARGEABLE ACCOUNTING PERIODS, SHOWED A PROFIT IN THE MANAGING AGENCY BUSINESS BUT INCURRED LOSSES IN THE PHARMACEUTICAL BUSINESS IN THE NATIVE STATE. THE QUESTION WAS WHETHER IN ASCERTAINING THE BUSINESS PROFITS OF THE ASSESSE E FOR THE PURPOSE OF THE BUSINESS PROFITS TAX ACT, 1947, THE LOSSES INCURRED IN THE N ATIVE STATE REDUCED THE BRITISH INDIAN PROFITS OF THE ASSESSEE. IT WAS HELD THAT TH E THIRD PROVISO TO S. 5 OF THE BUSINESS PROFITS TAX ACT TOOK OUT OF THE AMBIT OF T HE ACT MERELY THE 'INCOME, PROFITS OR GAINS' OF A BUSINESS IN AN INDIAN STATE AND DID NOT EXCLUDE THE BUSINESS ITSELF. THE LOSS SUFFERED BY THE ASSESSEE IN THE PHARMACEUT ICAL BUSINESS CARRIED ON IN THE STATE OF BARODA HAD TO BE DEDUCTED IN COMPUTING THE BUSINESS INCOME OF THE ASSESSEE FOR THE PURPOSE OF THE BUSINESS PROFITS TA X. THE SUPREME COURT FURTHER HELD THAT THE EXPRESSION 'INCOME, PROFITS OR GAINS' IN T HE THIRD PROVISO TO S. 5 OF THE BUSINESS PROFITS TAX ACT, IN ITS CONTEXT, DID NOT I NCLUDE LOSSES. 28. THE HON'BLE CALCUTTA HIGH COURT FINALLY CONCLUDED BY HOLDING AS FOLLOWS: 'IT APPEARS TO US THAT CL. (27) OF S. 10 EXCLUDES I N EXPRESS TERMS ONLY 'ANY INCOME DERIVED FROM A BUSINESS OF LIVESTOCK BREEDIN G OR POULTRY OR DAIRY FARMING'. IT DOES NOT EXCLUDE THE BUSINESS OF LIVES TOCK BREEDING OR POULTRY OR DAIRY FARMING FROM THE OPERATION OF THE ACT.' ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 11 29. BEFORE THE HON'BLE CALCUTTA HIGH COURT THE REVENUE PLACED STRONG RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT V. HARPRASAD & CO. (P.) LTD. [1975] 99 ITR 118. THE FACTS OF THE CASE WERE, THE ASSESSEE CLAIMED CAPITAL LOSS ON SALE OF SHARES OF RS. 28,662 DURING THE PREVIOUS YE AR RELEVANT TO ASSESSMENT YEAR 1955-56. THE INCOME-TAX OFFICER DISALLOWED THE LOSS ON THE GROUND THAT IT WAS A LOSS OF A CAPITAL NATURE. THE CIT(A) CONFIRMED THE ORDER OF THE ITO. BEFORE TRIBUNAL THE ASSESSEE MODIFIED ITS CLAIM AND SOUGHT THAT THE LOS S WHICH HAD BEEN HELD TO BE A 'CAPITAL LOSS' BY THE AUTHORITIES BELOW, SHOULD BE ALLOWED TO BE CARRIED FORWARD AND SET OFF AGAINST PROFITS AND GAINS, IF ANY, UNDER TH E HEAD 'CAPITAL GAINS' EARNED IN FUTURE, AS LAID DOWN IN SUBSECTIONS (2A) AND (2B) O F SECTION 24 OF THE ACT. THE TRIBUNAL ACCEPTED THE CONTENTION OF THE ASSESSEE AN D DIRECTED THAT THE 'CAPITAL LOSS' OF RS. 28,662 SHOULD BE CARRIED FORWARD AND SET OFF AGAINST 'CAPITAL GAINS', IF ANY, IN FUTURE. ON FURTHER APPEAL THE HON'BLE DELHI HIGH CO URT CONFIRMED THE ORDER OF THE TRIBUNAL. ON FURTHER APPEAL BY THE REVENUE, THE FOL LOWING QUESTION WAS CONSIDERED BY THE HON'BLE SUPREME COURT: 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CAPITAL LOSS OF RS. 28,662 COULD BE DETERMINED AND CARRIED FORWARD IN A CCORDANCE WITH THE PROVISIONS OF SECTION 24 OF THE INDIAN INCOME-TAX ACT, 1922, WHEN THE PROVISIONS OF SECTION 12B OF THE INCOME-TAX ACT, 1922, ITSELF WERE NOT APPLICABL E IN THE ASSESSMENT YEAR 1955- 56.' 30. UNDER THE INCOME TAX ACT, 1922 CAPITAL GAIN WAS NO T INCLUDED AS A HEAD OF INCOME AND THEREFORE CAPITAL GAIN DID NOT FORM PART OF THE TOTAL INCOME. CERTAIN IMPORTANT AMENDMENTS WERE EFFECTED IN THE INCOME-TA X ACT BY ACT XXII OF 1947. A NEW DEFINITION OF 'CAPITAL ASSET' WAS INSERTED AS S ECTION 2(4A) AND 'CAPITAL ASSET' WAS DEFINED AS 'PROPERTY OF ANY KIND HELD BY AN ASSESSE E, WHETHER OR NOT CONNECTED WITH HIS BUSINESS, PROFESSION OR VOCATION', AND THE DEFI NITION THEN EXCLUDED CERTAIN PROPERTIES MENTIONED IN THAT CLAUSE. THE DEFINITION OF 'INCOME' WAS ALSO EXPANDED, AND 'INCOME' WAS DEFINED SO AS TO INCLUDE 'ANY CAPI TAL GAIN CHARGEABLE ACCORDING TO THE PROVISIONS OF SECTION 12B'. SECTION 6 OF THE IN COME-TAX ACT WAS ALSO AMENDED BY INCLUDING THEREIN AN ADDITIONAL HEAD OF INCOME, AND THAT ADDITIONAL HEAD WAS 'CAPITAL GAINS,' SECTION 12B, PROVIDED THAT THE TAX SHALL BE PAYABLE BY AN ASSESSEE UNDER THE HEAD 'CAPITAL GAINS' IN RESPECT OF ANY PROFITS OR G AINS ARISING FROM THE SALE, EXCHANGE OR TRANSFER OF A CAPITAL ASSET EFFECTED AFTER 31ST MARCH, 1946, AND THAT SUCH PROFITS AND GAINS SHALL BE DEEMED TO BE INCOME OF THE PREVI OUS YEAR IN WHICH THE SALE, EXCHANGE OR TRANSFER TOOK PLACE. THE INDIAN FINANCE ACT, 1949, VIRTUALLY ABOLISHED THE LEVY AND RESTRICTED THE OPERATION OF SECTION 12B TO 'CAPITAL GAINS' ARISING BEFORE THE 1ST APRIL, 1948. BUT SECTION 12B, IN ITS RESTRICTED FORM, AND THE VITH HEAD, 'CAPITAL GAINS' IN SECTION 6, AND SUB-SECTIONS (2A) AND (2B) OF SECTION 24 WERE NOT DELETED AND CONTINUED TO FORM PART OF THE ACT. THE FINANCE (NO. 3) ACT, 1956, REINTRODUCED THE 'CAPITAL GAINS' TAX WITH EFFECT FROM THE 31ST M ARCH, 1956. IT SUBSTANTIALLY ALTERED THE OLD SECTION 12B AND BROUGHT IT INTO ITS PRESENT FORM. AS A RESULT OF THE FINANCE (NO. 3) ACT OF 1956, 'CAPITAL GAINS' AGAIN BECAME T AXABLE IN THE ASSESSMENT YEAR 1957-58. THE POSITION THAT EMERGES IS THAT 'CAPITAL GAINS' ARISING BETWEEN APRIL 1, 1948, AND MARCH 31, 1956, WERE NOT TAXABLE. THE CAP ITAL LOSS IN QUESTION RELATED TO THIS PERIOD. 31. IN THE ABOVE BACKGROUND OF LAW, THE HON'BLE SUPREM E COURT HELD AS FOLLOWS: ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 12 'FROM THE CHARGING PROVISIONS OF THE ACT, IT IS DIS CERNIBLE THAT THE WORDS 'INCOME' OR 'PROFITS AND GAINS' SHOULD BE UNDERSTOOD AS INCLUDI NG LOSSES ALSO, SO THAT, IN ONE SENSE 'PROFITS AND GAINS' REPRESENT 'PLUS INCOME' W HEREAS LOSSES REPRESENT 'MINUS INCOME'. IN OTHER WORDS, LOSS IS NEGATIVE PROFIT. B OTH POSITIVE AND NEGATIVE PROFITS ARE OF A REVENUE CHARACTER. BOTH MUST ENTER INTO COMPUT ATION, WHEREVER IT BECOMES MATERIAL, IN THE SAME MODE OF THE TAXABLE INCOME OF THE ASSESSEE. ALTHOUGH SECTION 6 CLASSIFIES INCOME UNDER SIX HEADS, THE MAIN CHARGIN G PROVISION IS SECTION 3 WHICH LEVIES INCOME-TAX, AS ONLY ONE TAX, ON THE 'TOTAL I NCOME' OF THE ASSESSEE AS DEFINED IN SECTION 2(15). AN INCOME IN ORDER TO COME WITHIN TH E PURVIEW OF THAT DEFINITION MUST SATISFY TWO CONDITIONS. FIRSTLY, IT MUST COMPRISE T HE 'TOTAL AMOUNT OF INCOME, PROFITS AND GAINS REFERRED TO IN SECTION 4(1)'. SECONDLY, I T MUST BE 'COMPUTED IN THE MANNER LAID DOWN IN THE ACT'. IF EITHER OF THESE CONDITION S FAILS, THE INCOME WILL NOT BE A PART OF THE TOTAL INCOME THAT CAN BE BROUGHT TO CHARGE. 32. THE HON'BLE SUPREME COURT THEREAFTER TOOK NOTE OF THE FACT THAT ANY 'CAPITAL GAINS' ARISING BETWEEN APRIL 1, 1948, AND APRIL 1, 1957 WAS NOT CHARGEABLE TO TAX. THE HON'BLE SUPREME COURT THEREFORE HELD THAT THE S ECOND CONDITION, NAMELY, 'THE MANNER OF COMPUTATION LAID DOWN IN THE ACT' WHICH ' FORMS AN INTEGRAL PART OF THE DEFINITION OF ' TOTAL INCOME'' WAS NOT SATISFIED. T HUS, IN THE RELEVANT PREVIOUS YEAR AND THE ASSESSMENT YEAR, OR EVEN IN THE SUBSEQUENT YEAR , CAPITAL GAINS OR 'CAPITAL LOSSES' DID NOT FORM PART OF THE 'TOTAL INCOME' OF THE ASSE SSEE WHICH COULD BE BROUGHT TO CHARGE, AND WERE, THEREFORE, NOT REQUIRED TO BE COM PUTED UNDER THE ACT. THE HON'BLE SUPREME COURT ANSWERED THE QUESTION REFERRED TO IT IN FAVOUR OF THE REVENUE. 33. THE HON'BLE CALCUTTA HIGH COURT REFERRED TO THE AB OVE DECISION AND THE PASSAGE SET OUT ABOVE, AND OBSERVED AS FOLLOWS: 'THIS PASSAGE MUST BE UNDERSTOOD IN THE CONTEXT IN WHICH THE AFORESAID OBSERVATIONS WERE MADE IN VIEW OF THE FACT AS POINTED OUT BY THE SUPREME COURT THAT 'CAPITAL GAINS' WERE NEITHER INTRINSICALLY NOR CONGENITALLY OF INCOME CHARACTER.' 34. WE ARE OF THE VIEW THAT THE AFORESAID DECISION OF THE HON'BLE CALCUTTA HIGH COURT AND THE REASONING CONTAINED THEREIN WOULD NOT BE AP PLICABLE TO THE FACTS OF THE ASSESSEE'S CASE. THE HON'BLE CALCUTTA HIGH COURT DI STINGUISHED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HARPRASAD & CO . (P.) LTD.'S CASE (SUPRA) BECAUSE THAT CASE RELATED TO AY 55-56 AND AS PER TH E LAW APPLICABLE FOR THAT AY, CAPITAL GAIN WAS NOT REGARDED AS INCOME AT ALL. IT IS NO DOUBT TRUE THAT IN AY 04-05, THE ASSESSMENT YEAR WITH WHICH WE ARE CONCERNED IN THIS APPEAL, CAPITAL GAIN IS INCOME AS PER SEC. 2(24)(VI) OF THE ACT. IT IS BY V IRTUE OF SEC. 10(33) OF THE ACT THAT ANY INCOME ARISING FROM THE TRANSFER OF A CAPITAL A SSET, BEING A UNIT OF THE UNIT SCHEME, 1964 REFERRED IN SCHEDULE I TO THE UNIT TRU ST OF INDIA (TRANSFER OF UNDERTAKING AND REPEAL) ACT, 2002, (58 OF 2002) ON OR AFTER THE 1ST DAY OF APRIL, 2002 THAT IS NOT INCLUDED WHILE COMPUTING TOTAL INC OME OF AN ASSESSEE. WE ARE OF THE VIEW THAT THE SOURCE (BOTH CAPITAL GAIN AND CAPITAL LOSS) VIZ., SALE OF UNITS OF US 64 IS ITSELF EXCLUDED AND NOT ONLY INCOME (CAPITAL GAIN) ARISING ON SALE OF UNITS OF US 64 ALONE THAT IS EXCLUDED BY SEC. 10(33) OF THE ACT. I N THIS REGARD WE ALSO NOTICE FROM THE HISTORY OF US 64 SCHEME THAT THE GOVERNMENT WAN TED TO BAIL OUT SMALL INVESTORS AND CAME OUT WITH THE SCHEME WHEREBY THEY ARE ALLOW ED TO EXIT FROM THE SCHEME WITHOUT MUCH LOSS. THE PROVISIONS OF SEC. 10(33) OF THE ACT WERE INSERTED ONLY WITH A VIEW TO ENSURE THAT THOSE WHO GAINED ON CAPITAL BY TRANSFER OF US 64 SCHEME DO NOT PAY TAX ON SUCH GAIN. THE PROVISIONS ARE NOT MEANT TO ENABLE AN ASSESSEE TO CLAIM LOSS BY INDEXATION FOR SET OFF AGAINST OTHER CAPITA L GAIN CHARGEABLE TO TAX. THE ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 13 INTENTION OF THE LEGISLATURE WAS ONLY TO RESTORE ST ATUS QUO ANTE AND NOT TO CONFER ANY BENEFIT OF CARRY FORWARD OF CAPITAL LOSS FOR SET OF F AGAINST CAPITAL GAIN CHARGEABLE TO TAX IN THE SUBSEQUENT ASSESSMENT YEARS. THE ECONOMI C REASONS FOR INSERTION OF SEC. 10(33) OF THE ACT CLEARLY SHOWS THAT THE SOURCE VIZ ., TRANSFER OF CAPITAL ASSET BEING UNITS OF US 64 ITSELF THAT HAS BEEN EXCLUDED BY THE WILL OF THE LEGISLATURE AND NOT THE CAPITAL GAIN ALONE. IN THAT VIEW OF THE MATTER WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). WE ALSO CLARIFY THAT THE QUESTION WH ETHER CONVERSION OF UNITS OF US 64 INTO 6.75% TAX FREE BONDS WOULD AMOUNT TO TRANSFER OR NOT DOES NOT ARISE IN THIS CASE, SINCE THE AO AFTER HOLDING THAT THERE WAS NO TRANSFER, NEVERTHELESS COMPUTED CAPITAL LOSS AT A SUM LESS THAN WHAT WAS CLAIMED BY THE ASSESSEE. FOR THE REASONS GIVEN ABOVE, GR. NO. I RAISED BY THE ASSESSEE IS DI SMISSED. 5.1 AS REGARDS THE CONTENTION OF THE LD.SENIOR COUN SEL ALLEGING THAT THE ABOVE SAID DECISION HAS BEEN RENDERED OUT OF CERTAIN MIST AKES, FIRSTLY, AS TO THE EFFECTIVE DATE OF APPLICATION OF THE PROVISIONS OF SECTION 10 (35) BY REFERRING PARAS 21 AND 22 OF THE ORDER, WE ARE OF THE CONSIDERED OPINION THAT NO SUCH MISTAKE APPEARS IN THE SAID PARAS AS THE TRIBUNAL HAS ONLY STATED THAT THE PROVISO TO SEC. 10(35) OF THE ACT CANNOT COVER UNITS OF US 1964 SCHEME BECAUSE AS ON 1-4-2004 UNITS OF US 1964 SCHEME WERE NOT IN EXISTENCE AS THEY BECAME 6.75% T AX FREE BONDS OR WERE REDEEMED AS EARLY AS 31.5.2003. SECONDLY, AS REGARD S THE ALLEGED MISTAKE POINTED OUT BY THE LD.SENIOR COUNSEL IN PARA 34 OF THE SAID ORDER NAMELY, THE ECONOMIC REASONS FOR INSERTION OF SEC. 10(33) OF THE ACT, C ANNOT BE THE BASIS ON WHICH WE CAN DEVIATE FROM FOLLOWING THE DECISION OF THE TRIBUNAL . 5.2 ANOTHER ARGUMENT OF THE LD.COUNSEL FOR THE ASSE SSEE IS THAT IF STRICT AND LITERAL CONSTRUCTION OF A STATUTE LEADS TO AN ABSURD RESULT AND IF ANOTHER CONSTRUCTION IS POSSIBLE APART FROM THE STRICT LITERAL CONSTRUCTION , THAT CONSTRUCTION SHOULD BE PREFERRED TO THE STRICT AND LITERAL CONSTRUCTION. T HE SAID CONTENTION OF THE LD.COUNSEL HAS BEEN PLACED IN THE CONTEXT, WHEN THE STATUTE PR OTECTS THE PERSONS WHO ARE EARNING THE INCOME, IT IS REDUNDANT TO SAY THAT IT DOES NOT PROTECT THE PERSONS WHO SUSTAINED LOSS. IN THIS CONNECTION, IT IS PERTINENT TO MENTION THAT WHERE THE LANGUAGE OF A TAXING PROVISION IS PLAIN, THE COURT CANNOT CO NCERN ITSELF WITH THE INTENTION OF THE LEGISLATURE. THE ARGUMENTS OF THE SENIOR COUNSEL SQ UARELY REVOLVES AROUND THE ALLEGED UNREASONABLENESS OF THE ACT BY STATING THAT THE STATUTE PROTECTS THE PERSONS WHO ARE EARNING THE INCOME, IT IS REDUNDANT TO SAY THAT IT DOES NOT PROTECT THE PERSONS WHO SUSTAINED LOSS. IT IS ALSO NOT OUT OF CONTEXT TO MENTION THAT IT IS NOT WITHIN THE COMPETENCE OF THIS TRIBUNAL TO QUASH OR STRIKE DOWN ANY PROVISION OF THE ITA NO. 6633/MUM/2009 SARALA M. MAHESHWARI ASSESSMENT YEAR: 2004-05 14 ACT, HOWEVER, HARSH OR UNREASONABLE, THE SAME MAY B E. THE PRINCIPLE OF JUDICIAL INTERPRETATION HAS A LIMITED SCOPE, WHEREAS IF THE PROVISIONS OF THE STATUTE ARE ARBITRARY/UNCONSTITUTIONAL/REDUNDANT/UNREASONABLE, THE SAME CAN ONLY BE STRUCK DOWN BY A COURT OF COMPETENT JURISDICTION AND THE S AME CANNOT BE NULLIFIED BY WAY OF JUDICIAL INTERPRETATION. 5.3 MOREOVER, WE FIND MERITS IN THE CONTENTION OF T HE LD.DR THAT SIMILAR ARGUMENTS OF THE ASSESSEE HAVE BEEN DEALT WITH BY T HE TRIBUNAL IN THE CASE OF M/S. SCHRADER DUNCAN LTD (SUPRA) AND HENCE THE ORDER OF THE TRIBUNAL IN THE SAID CA SE HAS TO BE FOLLOWED CONSIDERING THE FACT THAT SIMILA R ISSUES ARE INVOLVED IN THE PRESENT CASE OF THE ASSESSEE ALSO. CONSIDERING THE FACT THA T THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. SCHRADER DUNCAN LTD (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE IN HAND AND THERE IS NO NEED FOR TAKING ANY CO NTRADICTORY VIEW DEVIATING FROM THE SAID DECISION, WE FOLLOWING THE SAID ORDER, FIN D NO INFIRMITY IN THE DECISION OF THE LD.CIT(A) CONFIRMING THE ACTION OF THE AO IN DISALL OWING A SUM OF RS.70,38,887/- BEING LONG TERM CAPITAL LOSS ON SALE OF UNITS OF UT I UNIT SCHEME 1964. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 3 RD DAY OF APRIL, 2014. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23.04.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR H BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.