Sri Sanjay Gupta, Kanpur V. Dy. Commissioner Of Income Tax--4, Kanpur

MA 106/LKW/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3044 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PUNEET KUMAR
• Assessee Lawyers: P K KAPOOR
• Keywords: Capital asset; Business income; Business expenditure; Question of law

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER M.A. NO.106 /LKW/20 14 (ARISING OUT OF I.T.A.NO.217/LKW/2012) ASSESSMENT YEAR:2008 - 09 SHRI SANJAY GUPTA, 7/51, TILAK NAGAR, KANPUR. PAN:ACZPG8332N VS. DY.C.I.T. - 4, KANPUR. (A PPLICANT ) (RESPONDENT) M.A. NO.107 /LKW/20 14 (ARISING OUT OF I.T.A.NO.218/LKW/2012) ASSESSMENT YEAR:2008 - 09 SHRI SAMEER GUPTA, 7/51, TILAK NAGAR, KANPUR. PAN:ACZPG8336J VS. DY.C.I.T. - 4, KANPUR. (A PPLICANT ) (RESPONDENT) M.A. NO.108 /LKW/20 14 (ARISING OUT OF I.T.A.NO.219/LKW/2012) ASSESSMENT YEAR:2008 - 09 SHRI RAHUL GUPTA, 7/51, TILAK NAGAR, KANPUR. PAN:AEOPG4551L VS. DY.C.I.T. - 4, KANPUR. (A PPLICANT ) (RESPONDENT) M.A. NO.109 /LKW/20 14 (ARISING OUT OF I.T.A.NO.220/LKW/2012) ASSESSMENT YEAR:2008 - 09 SHRI SANDEEP GUPTA, 7/51, TILAK NAGAR, KANPUR. PAN:ACZPG8333P VS. DY.C.I.T. - 4, KANPUR. (A PPLICANT ) (RESPONDENT) [ 2 ] M.A. NO.112 /LKW/20 14 (ARISING OUT OF I.T.A.NO.221/LKW/2012) ASSESSMENT YEAR:2008 - 09 SHRI YOGENDRA MOHAN GUPTA, 7/51, TILAK NAGAR, KANPUR. PAN:AAXPG9726A VS. DY.C.I.T. - 4, KANPUR. (A PPLICANT ) (RESPONDENT) M.A. NO.113 /LKW/20 14 (ARISING OUT OF I.T.A.NO.222/LKW/2012) ASSESSMENT YEAR:2008 - 09 SHRI SIDDHARTH GUPTA, 7/51, TILAK NAGAR, KANPUR. PAN:AEWPG3950R VS. DY.C.I.T. - 4, KANPUR. (A PPLICANT ) (RESPONDENT) APPLICANT BY SHRI P. K. KAPOOR, C.A. RESPONDENT BY SHRI PUNEET KUMAR, D. R. DATE OF HEARING 27/03/2015 DATE OF PRONOUNCEMENT 1 6 /04/2015 O R D E R PER A. K. GARODIA, A.M. ALL THESE MISC. APPLICATIONS ARE FILED BY DIFFERENT ASSESSEES POINTING OUT A COMMON MISTAKE IN A COMBINED TRIBUNAL ORDER DATED 30/06/2014. ALL THESE MISC. APPLICATIONS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ALL THESE MISC. APPLICATIONS ARE IDENTICAL AND THEREFORE, WE REPRODUCE THE CONTENTS OF MISC. APPLICATION NO. 106/LKW/2 014, WHICH ARE AS UNDER: [ 3 ] MAY IT PLEASE YOUR HONOURS; THE ABOVE MENTIONED ASSESSEE / RESPONDENT BEGS FOR LEAVE TO SUBMIT HEREWITH THE MISC. APPLICATION CAPTIONED AS ABOVE, FOR FAVOUR OF CONSIDERATION BY YOUR HONOURS. 2. THE ABOVE REFERRED ORDER IS A CONSOLIDATED ONE PASSED BY THE HONBLE ITAT IN SIX APPEALS BEING SL.NO. ITA NOS. NAMES OF THE PARTIES (I) 217/LKW/2012 DY. CIT, KANPUR VS. SHRI SANJAY GUPTA (II) 218/LKW/2012 DY. CIT, KANPUR VS. SHRI SAMEER GUPTA (III) 219/LKW/2012 DY. CIT, KANPUR VS. SHRI RAHUL GUPTA (IV) 220/LKW/2012 DY. CIT, KANPUR VS. SHRI SANDEEP GUPTA (V) 221/LKW/2012 DY. CIT, KANPUR VS. SHRI YOGENDRA MOHAN GUPTA (VI) 222/LKW/2012 DY. CIT, KANPUR VS. SHRI SIDDHARTH GUPTA ALL RELATING TO ASSESSMENT YEAR 2008 - 09. I . BACKGROUND OF THE CASE 3. THE GROUNDS ON WHICH REVENUE HAS PREFERRED THE ABOVE MENTIONED SIX APPEALS, ARE IDENTICAL. TAKING THE CASE OF SRI SANJAY GUPTA, THE LEADING CASE, THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN HIS CASE ARE REPRODUCED HEREUNDER : - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE BY A.O. IN SPITE OF THE FACT THAT THESE SHARES WERE PURCHASED BY THE ASSESSEE ON AN EXTRANEOUS CONSIDERATION FOR THE BENEFIT OF PREFERENCE SHARE HOLDERS BEING ASSESSEE HIMSELF OF THE COMPANY WHICH IS IN VIOLATION OF SECTION 40A(2A)(B) OF THE I.T. ACT. 2. IN DOING SO, LD. CIT(A) DID NOT CONSIDER THE FACT THAT BY DOING SO THE ASSESSEE DID NOT LOSE THE TITLE OF THE FUND AS THIS WAS USED TO FINANCE THE REDEMPTION OF PREFERENCE SHARE HELD BY THE ASSESSEE HIMSELF BEING THE DIRECTOR OF THE COMPANY AND WHICH WERE SUBSEQUENTLY SOL D ON ABNORMALLY LOW PRICES JUST TO BENEFIT THE ASSESSEE WHICH RESULTED IN LOSS ON ACCOUNT OF SHORT TERM CAPITAL GAIN. [ 4 ] 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN GIVING RELIEF TO THE ASSESSEE AS THE FACT OF THE CASE IS SQUARELY COVERED BY THE DECISION IN THE CASE OF BHARAT HARI SINGHANIA VS. ACIT, ITAT (CAL) 58 ITD 189 AN M/S KERALA SMALL INDUSTRIAL DEVELOPMENT CORPORATION LTD. VS. CIT (KERALA) 270 ITR 452 WHERE THE CAPITAL LOSS ARISING OUT OF SALES OF SHARES UNDER THE SAME FACTS AND CIRCUMSTANCES WERE DISALLOWED BY THE HONBLE COURT. 4. THAT THE ORDER OF LD. COMMISSIONER OF INCOME TAX (A) - I, KANPUR BEING ERRONEOUS IN LAW AND ON THE FACTS DESERVES TO BE VACATED AND THAT THE ORDER OF ASSESSING OFFICER IS RESTORED. 5. THE APPELLAN T CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF THE APPEAL GIVEN ABOVE AND OR ADD ANY FRESH GROUNDS AS AND WHEN IT IS CONSIDERED TO DO SO. 4. IT IS STATED THAT THE CONTROVERSY THAT HAD ARISEN AT THE ASSESSMENT STAGE, WAS AS TO WHETHER THE ASSESSEE WAS JUS TIFIED IN CLAIMING SHORT - TERM CAPITAL LOSS ON SALE OF SHARES HELD BY HIM IN M/S SHAKUMBARI SUGAR AND ALLIED INDUSTRIES LTD. (SSAIL FOR SHORT), ACQUIRED ON 07.12.2007 AND SOLD ON 15.12.2007. THE ASSESSING OFFICER HAD DENIED THE CLAIM BY HOLDING THAT THE ASS ESSEE WAS PROMPTED TO ACQUIRE THE SHARES OF SAID SSAIL ONLY A FEW DAYS BEFORE THE SAME WERE SOLD FOR EXTRANEOUS CONSIDERATION OF BENEFITTING THE PREFERENTIAL SHARE HOLDERS OF THE COMPANY AS ALSO TO ENSURE THE PAYMENT OF LENDERS OF UNSECURED LOANS ( PARA 4. 5 OF THE ASSESSMENT ORDER). A BRIEF RESUME OF THE OVERALL FACTS OF THE CASE WITH CROSS - REFERENCE TO THE MATERIAL AND INFORMATION THAT HAD BEEN PLACED BEFORE THE HONBLE ITAT, HAVE BEEN GIVEN IN FACTS OF THE CASE, WHICH IS ENCLOSED AND THE SAME HAS BEEN MARKED AS ANNEXURE I (PAGES 11 TO 16) HERETO. 5. THUS, FROM THE ASSESSMENT ORDER DATED 16.12.2010 WHICH WAS SUBJECTED TO FIRST APPEAL BEFORE THE LD.CIT(A), THE ONLY ISSUE THAT EMERGED FOR THE CONSIDERATION OF AUTHORITIES BELOW, RELATED TO DISALLOWANCE OF SHORT TERM CAPITAL LOSS INCURRED ON SALE OF SHARES IN SSAIL, WHICH HAD BEEN PURCHASED ON 07.12.2007 AND SOLD TO M/S INDIA GLYCOL LTD. ON 15.12.2007. 6. AGGRIEVED BY THE ASSESSMENT ORDER DATED 16.12.2010, AS HAS BEEN REFERRED TO IN THE FACTS OF THE CASE (ANNEXURE - I), THE ASSESSEE (RESPONDENT BEFORE TH E HONBLE TRIBUNAL) HAD FILED AN [ 5 ] APPEAL UNDER SECTION 246A BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) I, KANPUR ON THE GROUNDS REPRODUCED HEREUNDER: - (I) BECAUSE THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 4, KANPUR HAS WRONGLY, I LLEGALLY AND ARBITRARILY DISALLOWED THE SHORT TERM CAPITAL LOSS AMOUNTING TO RS.1,30,10,881/ - . (II) BECAUSE THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 4, KANPUR HAS WRONGLY, ILLEGALLY AND ARBITRARILY ASSUMED AND PRESUMED THAT THE BUSINESS TRANS ACTION DONE AS PER THE AGREED CONDITIONS PRECEDENT BETWEEN TWO UNRELATED INDEPENDENT BUSINESS ENTITIES WAS THE TRANSACTION ESSENTIALLY OF SHAM CHARACTER AND THEREFORE THE LOSS RESULTING FROM SUCH SHAM TRANSACTION IS NOT ALLOWABLE. (III) BECAUSE THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 4, KANPUR HAS TAKEN MUCH PAINS TO WORKOUT THE AVOIDABLE SHORT TERM LOS WHILE NOT APPRECIATING THE BASIC PREMISE THAT THE COMPANY SSAIL, AND THE CONTINUATION OF BUSINESS WOULD HAVE RESULTED IN ABSOLUTE FINAN CIAL RUINATION. (IV) BECAUSE THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 4, KANPUR HAS WRONGLY, ILLEGALLY, ARBITRARILY AND PRESUMPTUOUSLY DISREGARDED A GENUINE BUSINESS TRANSACTION DONE AT ARMS LENGTH BETWEEN TWO UNRELATED INDEPENDENT GENUINE B USINESS ENTITIES AS A COLOURABLE AND SHAM TRANSACTION. 7. THE LD. CIT(A) DECIDED THE ISSUE OF ADMISSIBILITY OF SHORT TERM CAPITAL LOSS IN FAVOUR OF THE ASSESSEE, WHICH WAS THE ONLY ISSUE THAT HAD ARISEN FOR HIS CONSIDERATION. WHILE SO DECIDING, THE L EARNED CIT (A) DEALT WITH AT LENGTH THE FACTS OF THE CASE, AS HAVE BEEN STATED BRIEFLY IN ANNEXURE - I HERETO, AND ALSO RELIED UPON A LARGE NUMBER OF CASE LAWS WHICH WERE FULLY APPLICABLE ON THE FACTS OF THE CASE. AN EXTRACT OF RELEVANT PARAS OF THE APPEL LATE ORDER BEING PARAS NO.4, 4.1, 4.2, 4.3, 4.4, 4.5 & 5 UNDER THE HEAD DISCUSSION & DECISION IS ENCLOSED AND THE SAME HAS BEEN MARKED AS ANNEXURE - II (PAGES 17 TO 19) HERETO. 8. FULL TEXT OF SUCH CASE LAWS RELIED UPON BY THE CIT(A) AND ALSO OTHER CASE LAWS (ON WHICH THE ASSESSEE SOUGHT TO RELY IN THE PROCEEDINGS BEFORE THE HONBLE ITAT ALSO) ARE APPEARING IN THE COMPILATION RUNNING INTO 139 PAGES FILED BEFORE THE HONBLE ITAT. A BARE PERUSAL OF THE SAID CASE LAWS GOES TO SHOW THAT THE SAME [ 6 ] WERE FULLY A PPLICABLE TO THE FACTS OF THE PRESENT CASE AS HAVE BEEN SUMMARIZED IN THE FACTS OF THE CASE (ANNEXURE - I), ON ALL FOURS. 9. IT WILL ALSO BE SEEN FROM A PERUSAL OF THE ORDER OF THE LD. CIT(A) THAT WHILE CONSIDERING THE OVERALL BACKGROUND OF THE CASE, HE HAD APPRECIATED THE FACTORS RESPONSIBLE FOR ISSUANCE OF SHARES ON 07.12.2007 AT THE FACE VALUE THEREOF AND SALE OF THE SAME ON 15.12.2007 TO M/S INDIA GLYCOL LTD. ON THE PRICE DETERMINED ON THE BASIS OF VALUATION OF THE BUSINESS ENTERPRISE AS HAD BEEN M ADE BY AN INDEPENDENT VALUER. ONLY AFTER SUCH AN ANALYSIS, HE HAD ACCEPTED THE GENUINENESS OF SHORT TERM CAPITAL LOSS AND DIRECTED THE ASSESSING OFFICER TO ALLOW THE SHORT TERM CAPITAL LOSS AS COMPUTED, AS PER DISCUSSIONS APPEARING IN PARA 4, 4.1, 4.2, 4 .3, 4.4, 4.5 AND 5 OF HIS ORDER. 10. IT IS EMPHASIZED THAT AT NONE OF THE STAGES BELOW, THERE AROSE ANY ISSUE WITH REGARD TO THE WORKING OF LONG TERM CAPITAL GAIN (ARISING ON SALE OF SHARES) WHICH TOOK PLACE ON THE SAME DATE ON WHICH THE SALE OF SHARES HELD AS SHORT TERM CAPITAL ASSET TOOK PLACE, NOR THERE WAS ANY CONTROVERSY ABOUT THE SALE PRICE OF RS.3.15 PER SHARE AS HAS BEEN DETERMINED WITH REFERENCE TO THE VALUATION OF THE ENTERPRISE AS STOOD INCORPORATED IN THE AGREEMENT FOR PURCHASE OF SHARES ENTERED INTO WITH M/S INDIA GLYCOL LTD. II PROCEEDINGS IN APPEAL BEFORE THE HOBNBLE I.T.A.T. 11. IT WAS AGAINST THE ABOVE REFERRED ORDER OF THE FIRST APPELLATE AUTHORITY THAT THE REVENUE CAME UP IN APPEAL BEFORE THE HONBLE ITAT, ON THE GROUNDS THAT HAVE BEEN REPRODUCED IN PARA 3 HEREINFORE. THE SAID APPEAL, BEING ITA NO.217/LKW/2012, HAS BEEN DECIDED BY THE HONBLE ITAT VIDE ORDER DATED 13.06.2014, WHICH GIVES RISE TO THIS MISCELLANEOUS APPLICATION. A COPY OF THE SAID ORDER, WHICH IS SUBJECT MATTER OF THIS MISC. APPLICATION, IS ENCLOSED AND THE SAME HAS BEEN MARKED AS ANNEXURE III (PAGES 20 TO 28) HERETO. 12. DURING THE COURSE OF HEARING OF THE SAID APPEAL, THE ASSESSEE/RESPONDENT HAD RELIED UPON A VERY COMPREHENSIVE COMPILATION RUNNING INTO 138 PAGES, WHICH INCLUDED ALL SUCH MATERIAL AS WAS RELEVANT FOR THE PURPOSES OF DECISION OF THE ISSUE INV OLVED IN APPEAL FILED BY THE REVENUE, AND FROM THE SIDE OF THE [ 7 ] ASSESSEE THE SAME WAS EXTENSIVELY REFERRED TO AND RELIED UPON, DURING THE COURSE OF HEARING OF APPEAL. A COPY OF INDEX OF SUCH COMPILATION IS ENCLOSED AND MARKED AS ANNEXURE - IV (PAGES 29 TO 30) HERETO. III - MISTAKES APPARENT FORM RECORDS 13. FROM A PERUSAL OF THE GROUNDS OF APPEAL (REPRODUCED IN PARA 3 HEREINFORE), IT IS SEEN THAT ( A ) IN TERMS OF THE GRO UNDS NO.1 & 2 WHICH ARE THE SUBSTANTIVE GROUNDS AND INTERLINKED WITH EACH OTHER, THE REVENUE HAS RAISED THE ISSUE OF APPLICABILITY OF SECTION 40A(2)(A) AND (B) OF THE ACT [WRONGLY TYPED AS SECTION 40A(2A)(B)] ( B ) IN THE GROUND NO.3, IT HAS REFERRED TO CERTAIN CASES LAWS, WHICH ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE NARRATED IN BRIEF IN ANNEXURE I HERETO, AS IS EVIDENT FROM HEAD NOTES OF THE SAID CASE LAWS AS REPRODUCED HEREUNDER: - (I) BHARAT HARI SINGHANIA (HUF) VS. ACIT, ITAT CAL, 58 ITD 819 CAPITAL LOSS CHARGEABILITY - EXTINGUISHMENT OF RIGHT - ASSESSEE HELD SHARES OF A COMPANY - VALUE OF SHARES BECAME NIL AS LIABILITIES OF COMPANY EXCEEDS THE ASSETS - ONE UNIT OF COMPANY WAS NATIONALIZED - ALSO HIGH COURT DIRECTED THAT COMPANY BE WOUND UP - ASSESSEES CLAIM OF CAPITAL LOSS IN RESPECT OF SHARES REJECTED - JUSTIFIED - MERELY BECAUSE THE LIABILITIES OF COMPANY FAR EXCEEDED THE ASSETS AND, THEREFORE, THE VALUE OF THE SHARES BECAME NIL, IT CANNOT BE STATED THAT THERE WAS A TRANSFER OF THE CAPITAL ASSET - FURTHER UNLESS AND UNTIL HIGH COURT PASSES DISSOLUTION UNDER S.481 OF THE COMPANIES ACT, IT IS NOT POSSIBLE TO SAY THAT RIGHT OF SHAREHOLDER COMES TO AN END - ALSO S.46(2) COMES INTO OPERATION ON WHEN THE ASSESSEE RECEIVES ANY MONEY OR OTHER ASSETS FROM THE COMPANY UNDER LIQUIDATION - HENCE THERE IS NO TRANSFER OF SHARES OR EXTINGUISHMENT OF ASSESSEES RIGHT - NO CAPITAL LOSS, THEREFORE, CAN BE COMPUTED. [ 8 ] ( II ) KERALA SMALL INDUSTRIES DEVELOPMENT CORPN. LTD. VS. CIT 270 ITR 452 BUSINESS EXPENDITURE BUSINESS LOSS STATE GOVERNMENT COMPANY FORMED FOR PROMOTING EMPLOYMENT SHARES HELD BY ASSESSEE IN INDUSTRIAL CO - OPERATIVE SOCIETIES - LOSS ON REVALUATION OF SHARES IN PROFIT AND LOSS ACCOUNT - NOT A BUSINESS EXPENDITURE - NOT A LOSS INCIDENTAL TO TRADE - NOT DEDUCTIBLE INCOME TAX ACT 1961, SS 28, 37. CAPITAL GAINS - CAPITAL LOSS - LOSS ON ACCOUNT OF REVALUATION OF SHARES OWNED BY ASSESSEE - NO TRANSFER OF SHARES - LOSS NOT A CAPITAL LOSS - INCOME TAX ACT 1961. ( C ) THE FACTS OF THE CASE (AS PER ANNEXURE - I) THAT HAD BEEN CONSIDERED BY THE LD.C IT(A) VIDE PARAS 4, 4.1,4.2,4.3,4.4,4.5 & 5 (REPRODUCED IN ANNEXURE - II) WHILE DECIDING THE ISSUE THAT HAD ARISEN FROM THE ASSESSMENT ORDER, HAVE NOT BEEN DISPUTED. 14. IT IS STATED THAT (A) THE GROUNDS TAKEN BY THE REVENUE, PARTICULARLY THE GROUNDS NO. 1 & 2 (WHICH ARE THE SUBSTANTIVE GROUNDS) DID NOT ARISE FROM THE ORDER DATED 31.01.2012 PASSED BY THE LD. FIRST APPELLATE AUTHORITY; (B) THE PROVISIONS OF SECTION 40A(2A)/(B) HAD NEVER BEEN IN THE RECKONING EITHER AT THE ASSESSMENT STAGE OR EVEN AT THE S TAGE OF THE LD. FIRST APPELLATE AUTHORITY, AND IT COULD NOT HAVE BEEN SO AS THE SAID SECTION REFERS TO REASONABLENESS OR OTHERWISE OF THE EXPENDITURE INCURRED (CLAIMED AS DEDUCTION IN THE COMPUTATION OF BUSINESS INCOME); AND (C) THE SAID GROUNDS SUFFE RED FROM IRRELEVANCE AND VAGUENESS ALSO AND ARE, THEREFORE, NOT IN ACCORDANCE WITH THE PROCEDURE FOR FILING THE APPEAL. ON A DUE CONSIDERATION OF THESE INFIRMITIES ALONE, THE APPEAL FILED BY THE REVENUE DESERVED TO BE HELD AS NON - MAINTAINABLE AND NON - ADJUDICABLE BY THE HONBLE ITAT. [ 9 ] 15. AS STATED IN PARA 12 HEREINFORE, THE ASSESSEE/RESPONDENT HAD SUBMITTED A COMPREHENSIVE COMPILATION WHICH INCLUDED CASE LAWS ALSO (AS HAVE BEEN REFERRED TO IN THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY AND OTHERWISE) RUNNING INTO 138 PAGES. ON THE FACTS OF THE CASE (ANNEXURE I HERETO) IT HAS BEEN DEMONSTRATED THAT ALL SUCH MATERIAL AN D INFORMATION AS WAS NEEDED TO DECIDE THE REAL CONTROVERSY (THAT HAD ARISEN FROM THE STAGE OF THE ASSESSING OFFICER AND ADJUDICATED UPON BY THE LD. FIRST APPELLATE AUTHORITY) WERE AVAILABLE IN THE PAPER BOOK. THE HONBLE TRIBUNAL, IT APPEARS THAT, WITHOUT ADVERTING TO THE SAID COMPILATION (RUNNING INTO 138 PAGES) AS PER INDEX AS GIVEN IN ANNEXURE IV HERETO HAS OBSERVED AT PAGE 6 OF THE HONBLE ITAT ORDER DATED 13.06.2014, AS UNDER: - WE DO NOT KNOW WHICH FIGURE IS CORRECT REGARDING TOTAL SHARE HOLDING AND HOW MUCH LONG TERM CAPITAL LOSS WAS CLAIMED BY THE ASSESSEE IN RESPECT OF OLD SHARES HELD BY THE ASSESSEE AND WHETHER THE SAME WAS ALLOWED BY THE ASSESSING OFFICER OR NOT. THE ORDER OF LEARNED CIT(A) IS WITHOUT THROWING ANY LIGHT ON THESE ASPECTS. HENC E, IN OUR CONSIDERED OPINION, THE MATTER HAS TO GO BACK TO THE FILE OF THE LEARNED CIT(A) FOR FRESH DECISION AFTER EXAMINING ALL THESE FACTS BUT SUCH DECISION SHOULD BE AS PER THESE GUIDELINES. (PAGE 6) AND REMANDED THE MATTER BACK TO THE FILE OF LEARNED CIT(A) FOR FRESH ADJUDICATION. IT IS SUBMITTED THAT THE ABOVE REFERRED OBSERVATIONS ARE DUE TO NON - CONSIDERATION OF THE PAPER BOOK WHICH CONTAINED ALL THE INFORMATION AS WAS RELEVANT FOR THE ADJUDICATION OF THE CONTROVERSY AS HAS BEEN REFERRED TO IN PARA 4 HEREINFORE. NON - CONSIDERATION OF THE RELEVANT MATERIAL/PLEAS AS HAS BEEN PLACED BEFORE THE HONBLE ITAT, ITSELF CONSTITUTES A MISTAKE APPARENT FROM RECORD. 16. IT IS SUBMITTED THAT THE COMPILATION REFERRED TO IN PARA 12 HEREINFORE NOT ONLY CONTAINED ALL THE WELL - DOCUMENTED INFORMATION BUT ALSO THE JUDICIAL PRONOUNCEMENTS WHICH ARE FULLY APPLICABLE ON THE FACTS OF THE CASE (AS HAVE BEEN SUMMARIZED IN ANNEXURE I HERETO). OMISSION TO CONSIDER THE SAID COMPILATION, FACT S OF THE CASE IN THEIR ENTIRETY AND HOLDING THAT THE CASE LAWS, ON WHICH RELIANCE WAS PLACED ARE NOT RELEVANT, GIVE RISE TO MISTAKE RECTIFIABLE UNDER SECTION 254(2) AND THE PRINCIPLE OF LAW IN THIS RESPECT, AS HAS BEEN REFERRED TO ABOVE, IS FULLY APPLICABL E. [ 10 ] 17. THE FACTS OF THE CASE AND THE FINDINGS TO THE EFFECT THAT CASE LAWS REFERRED TO BY THE ASSESSEE ARE NOT APPLICABLE, AMOUNTS TO NON - CONSIDERATION OF THE CASE LAWS AS PER THE JUDGMENT AND ORDER DATED 16.07.2012 IN INCOME TAX REFERENCE NO.91 OF 1998 I N THE CASE OF CIT, KANPUR VA. QUALITY STEEL TUBES LIMITED, RELEVANT PORTION OF WHICH IS REPRODUCED HEREUNDER : - WE DO NOT FIND ANY DIFFERENCE IN THE CIRCUMSTANCES WHERE THE TRIBUNAL IGNORES THE JUDGMENT OF THE JURISDICTIONAL COURT, OR WRONGLY RELIES UPO N THE PRINCIPLE OF LAW LAID DOWN BY THE JURISDICTIONAL COURT. IN CASE OF MISREADING OR RELYING UPON A PRINCIPLE, WHICH WAS NEVER LAID DOWN IN SUCH JUDGMENT, THE REASONING WOULD BE THE SAME AS IF THE TRIBUNAL HAD NOT NOTICED THE JUDGMENT. A COPY OF THE SA ID JUDGMENT IS ENCLOSED AND THE SAME HAS BEEN MARKED AS ANNEXURE V (PAGES 31 TO 37) HERETO. 18. FURTHER, WHILE DECIDING THE REVENUES APPEAL VIDE ORDER DATED 13.06.2014 UNDER REFERENCE HERE, THE HONBLE ITAT HAS DIRECTED FOR A REVIEW OF THE MARKET PRICE OF THE ENTIRE SHARE HOLDING (INCLUDING THE SHARE HELD AS LONG TERM CAPITAL ASSET) ON 07.12.2007 AND FOR RE - WORKING NOT ONLY THE SHORT TERM CAPITAL LOSS, BUT ALSO THE LONG TERM CAPITAL LOSS BY WAY OF GUIDELINES AS GIVEN IN PARA 6 OF THE ORDER (PASSED BY THE HONBLE ITAT). THE SAID PARA 6 AND THE SUBSEQUENT PARA 7 ARE REPRODUCED HEREUNDER: - 6. SINCE THE ASSESSEE WAS ALSO HOLDING 2.60 LACS SHARES AS ON 07.12.2007 (IF THE FIGURES GIVEN ON PAGES 30 & 31 OF PAPER BOOK ARE CORRECT) BEFORE ACQUIRING FURTHER SHARES OF SSAIL, THE MARKET PRICE OF THESE SHARES SHOULD BE WORKED OUT ON THE BASIS OF NET AS SETS VALUE OF THE COMPANY SSAIL ON 07.12.2007 BY DIVIDING TOTAL NET ASSETS VALUE ON THAT DATE BY TOTAL NUMBER OF SHARES OF THAT COMPANY BEFORE FURTHER ISSUES OF SHARES OF THAT COMPANY. THE FRESH SHARES SHOULD BE CONSIDERED AS ISSUED AND THEREAFTER SOLD ON SUCH MARKET VALUE PER SHARE OF THE OLD SHARES FOR RAISING SAME AMOUNT RESULTING IN INCREASE IN NUMBER OF SHARES ISSUED BECAUSE WHATEVER LOSS IS INCURRED BY THE COMPANY AND CONSEQUENTLY THE SHAREHOLDERS, THE SAME WAS INCURRED TILL THIS DATE AND IT CANNOT BE SAID THAT FURTHER LOSS WAS INCURRED BETWEEN 07.12.2007 TO 15.12.2007. HENCE, THE LOSS IN HANDS OF THE SHAREHOLDER SHOULD ALSO BE IN RESPECT OF OLD SHARES HELD BY [ 11 ] HIM ON 07.12.007. IT SHOULD BE PRESUMED THAT MORE SHARES WERE ISSUED TO GARNER ENOUGH FUNDS F OR MAKING REPAYMENT OF PREFERENCE SHARES ALONGWITH THE ACCUMULATED DIVIDEND AND OTHER LIABILITIES. THEREAFTER, THE SALE OF SHARES ON 15.12.2007 SHOULD BE PRESUMED AT THE SAME PRICE BECAUSE INCREASE IN SHARE CAPITAL WILL RESULT INTO DECREASE OF LIABILITY I. E. PREFERENCE SHARES, ACCUMULATED DIVIDEND AND OTHER BANK LOANS ETC. BY SAME AMOUNT AND AS A CONSEQUENCE THEREOF, THE NEW SHARES TO BE ACQUIRED BY THE ASSESSEE ON 07.12.2007 WILL BE SOLD AT THE SAME PRICE AND IT WILL NOT RESULT INTO ANY SHORT TERM CAPITAL LOSS BUT THE LONG TERM CAPITAL LOSS IN RESPECT OF SALE OF OLD SHARES WILL GO UP. 7. ..SO FAR THE ISSUE OF NEW SHARES AT A PRICE BELOW THAN THE FACE VALUE IS CONCERNED, WE FIND THAT SUCH ISSUE OF SHARES AT A DISCOUNT IS PERMISSIBLE AS PER THE COMPANIES ACT AND HENCE, THERE IS NO PROBLEM ON THAT ASPECT. ACCORDINGLY, THE ORDER OF CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO HIS FILE FOR FRESH DECISION IN THE LIGHT OF THE ABOVE DISCUSSION. THE ASSESSEE SHOULD COOPERATE AND PROVIDE THE WORKING OF MARKE T VALUE OF SHARES AS ON 07.12.2007 PRIOR TO ISSUE OF FRESH SHARES. THE PRICE OF NEW SHARES TO BE ISSUED SHOULD BE WORKED OUT ON THE BASIS OF MARKET VALUE OF ASSETS ON 07.12.2007 DIVIDED BY NO. OF OLD SHARES AND QUANTITY OF NEW SHARES TO BE ISSUED SHOULD BE WORKED OUT BY DIVIDING THE AMOUNT REQUIRED FOR REPAYMENT OF LIABILITY BY SUCH MARKET VALUE OF SHARES AS ON 07.12.2007. THE SALE PRICE OF THE SHARES AS ON 15.12.2007 SHOULD BE THE SAME PRICE AS DETERMINED BY MARKET VALUE ON 07.12.2007 AND THIS WILL RESULT INTO NO PROFIT NO LOSS IN RESPECT OF NEW SHARES TO BE ACQUIRED ON 07.12.2007 BUT THE LONG TERM CAPITAL LOSS IN RESPECT OF SALE OF OLD SHARES WILL GO UP. 19. THE EFFECT OF THE GUIDELINES GIVEN BY THE HONBLE TRIBUNAL (AS HAVE BEEN REPRODUCED IN THE FOREG OING PARAGRAPH), WHICH ARE IN THE NATURE OF DIRECTIONS TO THE AUTHORITIES BELOW, IS THAT A FRESH CONTROVERSY GOT CREATED ABOUT THE VALUATION OF ENTERPRISE ON 07.12.2007, WHICH WAS WHOLLY NON - EXISTENT AT ALL THE STAGES. THIS COULD NOT HAVE BEEN DONE, LOO KING TO THE POWERS OF AN AUTHORITY OF THE TRIBUNAL ON DECIDING THE APPEAL. 20. MOREOVER, SUCH GUIDELINES AFFECT AND INTERFERE EVEN WITH THE WORKING OF LOSS ON THE ON LONG TERM CAPITAL ASSET WHICH HAD ATTAINED FINALITY AT THE STAGE OF THE ASSESSING OFFI CER HIMSELF AND WHICH HAS NEVER BEEN THE ISSUE AT ANY OF THE STAGES BELOW. WITH GREAT RESPECT, IT IS SUBMITTED THAT THE GUIDELINES (WHICH [ 12 ] WERE IN THE NATURE OF DIRECTIONS, WERE BEYOND THE SCOPE OF APPEAL (WITH WHICH THE HONBLE TRIBUNAL WAS SEIZED) AS ALSO THE AUTHORITY OF THE TRIBUNAL. 21. MOREOVER, FOR RE - DECISION, AS PER GUIDELINES/DIRECTIONS CONTAINED IN THE TRIBUNALS ORDER (AS HAVE BEEN REPRODUCED IN PARA 16 HEREINFORE) FURTHER MATERIAL/EVIDENCE HAVE BEEN DIRECTED TO BE COLLECTED. THIS IS CONTRARY T O THE EXPRESS PROVISIONS OF LAW DEALING WITH THE AUTHORITY OF THE TRIBUNAL IN DECIDING THE APPEAL, AS HAS COME TO BE INTERPRETED BY THE HONBLE JURISDICTIONAL HIGH COURT VIDE ITS JUDGMENT AND ORDER DATED 30.09.2008 IN THE CASE OF HARSINGAR GUTKHA VS ITAT P ASSED IN WRIT PETITION NO 6864 (B) OF 2008. A COPY OF THE SAID JUDGMENT IS ENCLOSED AND THE SAME HAS BEEN MARKED AS ANNEXURE - VI (PAGES 38 TO 41) HERETO. P R A Y E R 22. IT IS RESPECTFULLY PRAYED THAT THE HONBLE BENCH BE PLEASED; (A) TO DEAL WITH AND DECIDE THE ISSUES THAT HAVE BEEN RAISED IN THIS MISC. APPLICATION; AND (B) PASS AN APPROPRIATE ORDER, EITHER MODIFYING OR RECALLING THE ORDER DATED 13.06.2014, WHICH IS THE SUBJECT MA TTER OF THIS MISC. APPLICATION. 3. IN THE COURSE O F HEARING BEFORE US, LEARNED A.R. OF THE ASSESSEE REITERATED THE CONTENTIONS RAISED IN THE MISC. APPLICATION, AS REPRODUCED ABOVE. HE ALSO SUBMITTED THAT R ELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS IN COURSE OF HEARING OF THESE APPEALS BUT WERE NOT CONSIDERED IN THE TRIBUNAL ORDER : ( I ) EVEREADY INDUSTRIES INDIA LTD. VS. CIT [2011] 334 ITR 413 (CAL) ( II ) UNION OF INDIA VS. AZADI BACHAO ANDOLAN [2005] 263 ITR 706 (SC) ( III ) CIT VS. WALFORT SHARE AND STOCK BROKERS (P) LTD. [2010] 326 ITR 1 (SC) ( IV ) CIT VS. SHIV AKAMI CO. (P) LTD. [1986] 159 ITR 71 (SC) [ 13 ] ( V ) SIVAKAMI COMPANY PRIVATE LTD. VS. CIT [1973] 88 ITR 311 (MAD) ( VI ) LALCHAND BHAGAT AMBICA RAM VS. CIT [1959] 37 ITR 288 (SC) ( VII ) CIT VS. DURGA PRASAD MORE [1971] 82 ITR 540 (SC) 4. LEARNED D.R. OF THE REVENUE SUBMITTED THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER, THEREFORE, THIS MISC. APPLICATION SHOULD BE DISMISSED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE WOULD LIKE TO OBSERVE THAT IN ALL THESE CASES , THE ISSUE IN DISPUTE WAS ALLOWABILITY OF SHORT TERM CAPI TAL LOSS CLAIMED BY THE ASSESSEE IN RESPECT OF SHARES PURCHASED IN M/S SHAKUMBARI SUGAR AND ALLIED INDUSTRIES LTD. (SSAIL) @RS.10/ - PER SHARE ON 07/12/2007 AND SALE OF THE SAME SHARES ON 15/12/2007 @RS.3.15 PER SHARE TO M/S INDIA GLYCOL LTD. THE LOSS CLAI MED BY THE ASSESSEE WAS DISALLOWED BY THE ASSESSING OFFICER BY TREATING THE ENTIRE TRANSACTION AS SHAM. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND BEING AGGRIEVED, THE REVENUE FILE D APPEALS BEFORE THE TRIBUNAL AND WHILE DECIDING THESE APPEALS OF THE REVENUE, IT WAS HELD BY THE TRIBUNAL IN THESE CASES THAT IT CANNOT BE ACCEPTED THAT ANY LOSS WAS INCURRED DURING THIS PERIOD FROM 07/12/2007 TO 15/12/2007 AND THEREFORE, THE CLAIM OF THE ASSESSEE REGARDING SHORT TERM CAPITAL LOSS IS NOT ALLOWABLE . H OWEVER, IT WAS HELD BY THE TRIBUNAL AS PER PARA 6 OF THE IMPUGNED TRIBUNAL ORDER THAT SINCE THE ASSESSEE WAS ALSO HOLDING OLD SHARE S ON 07/12/2007, THE LOSS INCURRED BY THE ASSESSEE SHOULD BE H ELD TO BE ALLOWABLE AS LONG TERM CAPITAL LOSS HAVING BEEN INCURRED ON SALE OF THESE OLD SHARES. NOW IN THESE MISC. APPLICATIONS, THIS IS THE ARGUMENT OF THE ASSESSEE AS PER PARA 20 OF THE MISC. APPLICATION, AS REPRODUCED ABOVE, THAT THE ISSUE REGARDING LONG TERM CAPITAL LOSS WAS NOT BEFORE THE TRIBUNAL AND THEREFORE, THE DIRECTION OF THE TRIBUNAL IN THIS REGARD IS BEYOND THE AUTHORITY OF THE TRIBUNAL. IN THIS REGARD, RELIANCE HA S BEEN PLACED ON A JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF HARSINGAR GUTKHA VS. I.T.A.T. IN [ 14 ] WRIT PETITION NO. 6864 (B) OF 2008. IN OUR CONSIDERED OPINION, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS NOT RELEVANT IN THE PRESEN T CASE BECAUSE IN THAT CASE , APPEAL WAS EARLIER DECIDED BY THE TRIBUNAL AND AGAINST THE SAID TRIBUNAL DECISION, APPEAL WAS FILED BEFORE HON'BLE ALLAHABAD HIGH COURT AND THE MATTER WAS RESTORED BACK BY THE HON'BLE HIGH COURT TO THE TRIBUNAL FOR FRESH ADJUD ICATION ON THE BASIS OF MATERIAL ON RECORD. IN COURSE OF FRESH HEARING OF SUCH APPEAL, AS PER THE DIRECTION OF HON'BLE ALLAHABAD HIGH COURT AS PER INTER LOCUTARY ORDER DATED 25/07/2008, THE TRIBUNAL HAS DIRECTED THE ASSESSING OFFICER TO RECORD THE STATEME NT OF SHRI DINESH SINGH , ACA AND SHRI G. K. LATH TO ASCERTAIN WHETHER SHRI DINESH SINGH IS REPRESENTING BEFORE THE DEPARTMENT IN HIS INDIVIDUAL CAPACITY OR AS A PARTNER OF M/S SACHDEVA & CO. AND IN WHAT CAPACITY SHRI G. K. LATH RECEIVED THE NOTICE U/S 143( 2) OF THE ACT. UNDER THESE FACTS, IT WAS THE ARGUMENT OF THE ASSESSEE BEFORE HON'BLE HIGH COURT THAT IT WAS NOT PERMISSIBLE FOR THE TRIBUNAL TO DIRECT TO ADMIT FRESH EVIDENCE IN THE MATTER. UNDER THESE FACTS, IT WAS HELD BY HON'BLE HIGH COURT THAT IT WAS NOT OPEN FOR THE TRIBUNAL TO TAKE FRESH MATERIAL ON RECORD BECAUSE HON'BLE HIGH COURT HAS DIRECTED THE TRIBUNAL TO ADJUDICATE THE MATTER AFRESH ON THE BASIS OF MATERIAL ON RECORD. IT WAS ALSO HELD THAT THE DIRECTION ISSUED TO AN AUTHORITY OR TRIBUNAL TO DO A CERTAIN THING IN A CERTAIN MANNER, THE THING MUST BE DONE IN THAT MANNER AND IN NO OTHER MANNER. IN THE PRESENT CASE, THE APPEALS WERE DECIDED BY THE TRIBUNAL FOR THE FIRST TIME A ND THE IMPUGNED ORDER W AS NOT ON THE BASIS OF ANY DIRECTION OF HON'BLE ALLAHABAD HIGH COURT AND IT IS NOT THE CASE OF THE ASSESSEE THAT ANY DIRECTION OF HON'BLE ALLAHABAD HIGH COURT HAS BEEN VIOLATED BY THE TRIBUNAL WHILE DECIDING THESE APPEALS AND THEREFORE, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS NOT APPLICABLE IN THE PRESENT CASE. THERE IS A CONTENTION RAISED THAT THE DIRECTION OF THE TRIBUNAL TO ALLOW EXTRA LONG TERM CAPITAL LOSS IS A MISTAKE ON THE BASIS THAT THE ISSUE REGARDING LONG [ 15 ] TERM CAPITAL LOSS WAS NOT BEFORE THE TRIBUNAL AND THEREFORE, THE DIRECTION OF T HE TRIBUNAL IN THIS REGARD IS BEYOND THE AUTHORITY OF THE TRIBUNAL. IN THIS REGARD, WE WOULD LIKE TO OBSERVE THAT THIS DIRECTION IS CONSEQUENTIAL DIRECTION IN COURSE OF DECIDING THE ISSUE RAISED BEFORE THE TRIBUNAL REGARDING ALLOWABILITY OF SHORT TERM CAPI TAL LOSS ON SALE OF SHARES OF SSAIL TO INDIA GLYCOL LTD. AFTER HOLDING THAT THERE CANNOT BE A LOSS DURING 7.12.2007 TO 15.12.2007, THE TRIBUNAL HELD THAT THERE IS EXTRA LOSS ON SALE OF OLD SHARES WHICH WAS CLAIMED BY THE ASSESSEE AS SHORT TERM CAPITAL LOSS . THIS IS A SETTLED POSITION OF LAW THAT THE TRIBUNAL CAN DECIDE THE ISSUE IN DISPUTE BY WAY OF PASSING AN ORDER IT DEEMS FIT AND PROPER. HENCE, IF THE TRIBUNAL FOUND IT FIT AND PROPER THAT ON DISALLOWING THE CLAIM OF SHORT TERM CAPITAL LOSS ON SALE OF SHA RES OF SSAIL TO INDIA GLYCOL LTD. IN RESPECT OF PURCHASE OF THOSE SHARES ON 07.12.2007 AND SALE ON 15.12.2007, THE ASSESSEE DESERVED ALLOWING OF EXTRA LONG TERM CAPITAL LOSS ON SALE OF OLD SHARES OF SSAIL TO INDIA GLYCOL LTD., IT CANNOT BE TERMED AS EXCEED ING THE POWER OF THE TRIBUNAL AND HENCE A MISTAKE IN TRIBUNAL ORDER. 6. ONE MORE CONTENTION HAS BEEN RAISED BY THE ASSESSEE IN PARA 15 OF THE MISC. APPLICATION THAT THE ASSESSEE HAD SUBMITTED A COMPREHENSIVE COMPILATION WHICH INCLUDED CASE LAWS ALSO RUNNING INTO 138 PAGES BUT THE TRIBUNAL HAS DECIDED THESE APPEALS WITHOUT ADVERTING TO SUCH COMPILATION RUNNING INTO 138 PAGES. IN THIS REGARD, WE WOULD LIKE TO OBSERVE THAT AS PER SUB RULE (6) OF RULE 18 OF APPELLATE TRIBUNAL RULES, DOCUMENTS/RECORDS RELIED UPON BY THE PARTIES DURING THE COURSE OF ARGUMENTS SHALL ALONE BE TREATED AS PART OF THE RECORD OF THE TRIBUNAL. AS PER PARA 15 OF T HE MISC. APPLICATION, AS REPRODUCED ABOVE, THIS IS NOT THE CONTENTION OF THE ASSESSEE THAT ANY REFERENCE HAS BEEN MADE T O ANY OF TH ESE C O N T E N T S OF THIS COMPILATION IN COURSE OF HEARING OF THESE APPEALS AND THEREFORE, AS PER THIS RULE 18(6), IT IS NOT FOR MING PART OF THE TRIBUNAL RECORD AND TRIBUNAL WAS NOT SUPPOSE D TO ADVERT TO THE SAID COMPILATION AND THEREFORE, THERE IS NO MISTAKE IN THE TRIBUNAL ORDER. MOREOVER, REFERENCE WAS MADE BY THE TRIBUNAL TO TWO [ 16 ] JUDGMENTS IN PARA 4 OF THE TRIBUNAL ORDER AND THE REAFTER IN PARA 7, IT IS OBSERVED BY THE TRIBUNAL THAT THESE JUDGMENTS ARE NOT APPLICABLE BECAUSE THE SAME ARE N O T ON THIS ASPECT ON WHICH THE ISSUE WAS DECIDED BY THE TRIBUNAL. HENCE, IT CANNOT BE SAID THAT THE CITED JUDGMENTS WERE NOT CONSIDERED. 7. HOWEVER , EVEN IF WE CONSIDER THE REMAINING JUDGMENTS, THE RESULT DOES NOT CHANGE. THE FIRST JUDGMENT IS OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF EVEREADY INDUSTRIES INDIA LTD. V. CIT, 334 ITR 413. IN THIS CASE, THE ISSUE IN DISPUTE WAS REGARDING DIVIDEND STR IPPING TRANSACTION AND THE A.Y. INVOLVED WAS A.Y. 1990 91 AND SECTION 94 (7) WAS INSERTED IN THE ACT W.E.F. A.Y. 2002 03. IT WAS HELD THAT THE PROVISIONS OF SECTION 94 (7) ARE PROSPECTIVE AND NOT RETROSPECTIVE. IN THE PRESENT CASE, THIS IS NOT THE DI SPUTE THAT ANY SECTION IS INVOKED BY THE A.O. WHICH IS NOT IN THE STATUTE BOOK IN THE RELEVANT YEAR. HENCE, THIS JUDGMENT IS NOT APPLICABLE. 7.1 THE SECOND JUDGMENT IS UNION OF INDIA VS. AZADI BACHAO ANDOLAN, 263 ITR 706. THIS WAS ALREADY CONSIDERED IN TH E IMPUGNED TRIBUNAL ORDER. 7.2 THE THIRD JUDGMENT IS OF HONBLE APEX COURT IN THE CASE OF CIT VS. WALFORT SHARE AND STOCK BROKERS LTD., 326 ITR 1. IN THIS CASE ALSO, THE ISSUE IN DISPUTE WAS REGARDING DIVIDEND STRIPPING TRANSACTION AND THE A.Y. INVOLVED W AS A.Y. 2000 01 AND SECTION 94 (7) WAS INSERTED IN THE ACT W.E.F. A.Y. 2002 03. IT WAS HELD THAT THE PROVISIONS OF SECTION 94 (7) ARE PROSPECTIVE AND NOT RETROSPECTIVE. IN THE PRESENT CASE, THIS IS NOT THE DISPUTE THAT ANY SECTION IS INVOKED BY THE A .O. WHICH IS NOT IN THE STATUTE BOOK IN THE RELEVANT YEAR. HENCE, THIS JUDGMENT IS ALSO NOT APPLICABLE. 7.3 THE NE XT JUDGMENT IS OF HONBLE APEX C OURT IN THE CASE OF CIT VS. SHIVAKAMI CO. (P) LTD., 159 ITR 71. IN THIS CASE, THE ISSUE IN DISPUTE WAS [ 17 ] REGARD ING INCREASING THE CAPITAL GAIN BY INVOKING THE PROVISIONS OF SECTION 12B OF 1922 ACT WITHOUT BRINGING ANY EVIDENCE ON RECORD TO SHOW THAT EXTRA CONSIDERATION OVER AND ABOVE THE STATED CONSIDERATION WAS RECEIVED. IT WAS HELD THAT THE PROVISIONS OF SECTION 12B CANNOT BE INVOKED IN THE ABSENCE OF SUCH EVIDENCE. IN THE PRESENT CASE, THIS IS NOT THE DISPUTE THAT ANY SECTION IS INVOKED BY THE A.O. WHICH IS NOT IN THE STATUTE BOOK IN THE RELEVANT YEAR. HENCE, THIS JUDGMENT IS ALSO NOT APPLICABLE. 7.4 THE NEXT JU DGMENT IS OF HONBLE MADRAS HIGH COURT IN THE CASE OF LALCHAND BHAGAT AMBICA RAM VS. CIT 37 ITR 288. IN THIS CASE, THE ISSUE IN DISPUTE BEFORE HONBLE APEX COURT WAS REGARDING INTERFERENCE BY HIGH COURT IN FINDING OF FACT BY THE TRIBUNAL. IT WAS HELD THAT IF THE FINDING OF FACT RECORDED BY THE TRIBUNAL IS ON CONJECTURE, SURMISES OR MERE SUSPICION, IT CAN BE INTERFERED WITH BY THE HIGH COURT. IN THE PRESENT CASE, THE FINDING OF F ACT BY THE TRIBUNAL THAT NO LOSS WAS INCURRED IN THE SALE OF SHARES PURCHASED ON 07.12.2007 AT RS. 10 PER SHARE AND SOLD ON 15.12.2007 AT RS. 3.15 PER SHARE IS NOT ON THE BASIS OF CONJECTURE, SURMISES OR MERE SUSPICION BECAUSE IT IS SEEN THAT AS PER BALANC E SHEET AS ON 31.10.2007 AVAILABLE ON RECORD, THE NET WORTH PER SHARE ON THAT DAY WAS AS UNDER: - SHARE CAPITAL RS. 1934.42 LACS RESERVE & SURPLUS RS. 1868.11 LACS _______________ TOTAL RS. 3802.53 LACS LESS : ACCUMULATED LOSSES RS. 2733.14 LACS NET WORTH RS. 1069.39 LACS NO. OF SHARE ON THIS DAY 9,84,42000 NET WORTH PER SHARE RS. 1.086 PER SHARE AS AGAINST THIS BOOK VALUE OF RS. 1.086 PER SHARE ON 07.12.2007 , THE ASSESSEE HAS AGREED TO BUY NEW SHARES AT RS. 10 PER SHARE AND SOLD THE SAME FOR RS. [ 18 ] 3.15 PER SHARE WITHIN 8 DAYS. ON THE BASIS OF THESE FACTS, THE FINDING IS GIVEN BY THE TRIBUNAL THAT THERE IS NO LOSS DURING THIS PERIOD OF 07.12.2007 TO 15.12.2007 , WHICH CANNOT BE SAID TO BE A FINDING OF FACT ON THE BASIS OF CON JECT URE, SURMISES OR MERE SUSPICION AND HENCE THIS JUDGMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. 7.5 THE NEXT JUDGMENT IS OF HONBLE APEX COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540. THIS JUDGMENT IS IN FACT SUPPORTING THE CASE OF REVE NUE AND NOT OF THE ASSESSEE. IN THIS CASE, IT WAS HELD BY HONBLE APEX COURT THAT THE TRIBUNAL IS THE FINAL FACT FINDING BODY. IT CANNOT BE SAID THAT ITS FINDING AS TO THE UNREALITY OF THE TRUST PUT FORWARD IS NOT BASED ON ANY EVIDENCE OR THE SAME IS OTHER WISE VITIATED. PRIMA FACIE THE SAID FINDING IS A FINDING OF FACT. THE HIGH COURT DIRECTED THE TRIBUNAL TO STATE A CASE AND SUBMIT TO THE HIGH COURT THE QUESTION SET OUT EARLIER. FROM THAT QUESTION, IT APPEARS THAT THE HIGH COURT WAS OF THE OPINION THAT FOR ARRIVING AT ITS FINDING THE TRIBUNAL HAD TO INTERPRET THE TWO DOCUMENTS REFERRED TO IN THAT QUESTION. THIS CONCLUSION OF THE HIGH COURT APPEARS TO BE AN ERRONEOUS ONE. THE TRIBUNAL DID NOT INTERPRET THOSE DOCUMENTS. IT MERELY FOUND ITSELF UNABLE TO ACCEPT THE CORRECTNESS OF SOME OF THE RECITALS IN THOSE DOCUMENTS. THAT DOES NOT MEAN THAT THE TRIBUNAL INTERPRETED THOSE DOCUMENTS. WHETHER TO ACCEPT THOSE RECITALS OR NOT WAS WITHIN THE PROVINCE OF THE TRIBUNAL. UNLESS ITS CONCLUSION IS HELD TO BE PERVERSE OR IS NOT SUPPORTED BY ANY EVIDENCE OR IS BASED ON IRRELEVANT EVIDENCE, THE HIGH COURT HAD NO JURISDICTION TO INTERFERE WITH ITS FINDINGS. NO QUESTION OF LAW AROSE FROM THE ORDER OF THE TRIBUNAL AND, THEREFORE, THE HIGH COURT WAS NOT JUSTIFIED IN DIRECTING TH E TRIBUNAL TO STATE A CASE AND THE ANSWER GIVEN BY THE HIGH COURT TO THE QUESTION REFERRED TO IT IS UNSUSTAINABLE. IN THE PRESENT CASE ALSO , THE FINDING OF FACT BY THE TRIBUNAL THAT NO LOSS WAS INCURRED IN THE SALE OF SHARES PURCHASED ON 07.12.2007 AT RS. 10 PER SHARE AND SOLD ON 15.12.2007 A T RS. 3.15 PER SHARE IS NOT ON THE BASIS OF APPRECIATION OF FACTS OF THE PRESENT CASE WHICH SHOWS THAT AS AGAINST BOOK [ 19 ] VALUE OF THE SHARE AT RS. 1.086 PER SHARE ON 07.12.2007, THE ASSESSEE HAS AGREED TO BUY NEW SHARES AT RS. 10 PER SHARE AND SOLD THE SAME FOR RS. 3.15 PER SHARE WITHIN 8 DAYS. HENCE, AS PER THIS JUDGMENT OF HONBLE APEX COURT, IT IS A FINDING OF FACT. SINCE IT COULD NOT BE SHOWN THAT THE FACTS NOTED ARE INCORRECT, IT CANNOT BE SAID THAT THERE IS ANY APPA RENT MISTAKE IN THE TRIBUNAL ORDER. HENCE, THIS JUDGMENT IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE. 8. ONE MORE CONTENTION HAS BEEN RAISED IN PARA 14 OF THE MISC. APPLICATION THAT THE GROUNDS TAKEN BY THE REVENUE, PARTICULARLY GROUND NO. 1 & 2 DID NOT ARISE FROM THE ORDER DATED 31/01/2012 PASSED BY LEARNED CIT(A). IN THIS REGARD, WE WOULD LIKE TO OBSERVE THAT ALTHOUGH THE REVENUE HAS RAISED VARIOUS GROUNDS BUT THE ONLY ONE EFFECTIVE ISSUE WAS IN DISPUTE I.E. ALLOWABILITY OF SHORT TERM CAPITA L LOSS CLAIMED BY THE ASSESSEE BUT DISALLOWED BY THE ASSESSING OFFICER AND THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN THE MANNER IT THOUGHT FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THEREFORE, THIS OBJECTION IS ALSO WITHOUT ANY MERIT. IN FACT NO SUCH ARGUMENT WAS RAISED IN COURSE OF HEARING OF THESE APPEALS AND THUS OBJECTIONS CANNOT BE NOW RAISED IN COURSE OF MISC. APPLICATION PROCEEDINGS U/S 2 54(2) OF THE ACT. 9. WE ALSO DEAL WITH THE OBJECTION RAISED IN PARA 21 OF THE M.A. STATING THAT THE TRIBUNAL HAS DIRECTED TO COLLECT FURTHER MATERIAL/EVIDENCE. WE WANT TO MAKE IT CLEAR THAT THERE IS NO SUCH DIRECTION TO COLLECT ANY FURTHER MATERIAL/EVIDENCE. IN FACT THE TRIBUNAL DIRECTED TO WORK OUT NET ASSET VALUE OF SHARES OF SSAIL ON 07.12.2007. NOW IN PARA 6 ABOVE, WE HAVE ALREADY DONE THIS EXERCISE ON THE BASIS OF MATERIAL ALREADY AVAILABLE ON RECORD AND THE SAME IS WORKED OUT AD RS. 1.086 PER SHARE. THE A.O. SHOULD ADOPT THIS VALUE FOR CARRYING OUT THE DIRECTIONS OF THE TRIBUNAL IN PARA 6 OF THE IM PUGNED TRIBUNAL ORDER. [ 20 ] 10. AS PER ABOVE DISCUSSION, WE HAVE SEEN THAT NONE OF THE OBJECTIONS RAISED BY THE ASSESSEE IN THE MISC. APPLICATION IS HAVING ANY MERIT AND THEREFORE, THIS MISC. APPLICATION IS LIABLE TO BE DISMISSED. WE ORDER ACCORDINGLY. 1 1 . IT WAS AGREED BY BOTH THE SIDES THAT THE IMPUGNED TRIBUNAL ORDER IS COMBINED ORDER AND ALL THE MISC. APPLICATIONS ARE IDENTICAL AND THEREFORE, ONE MISC. APPLICATIONS CAN BE DECIDED FIRST AND SUCH DECISION CAN BE FOLLOWED IN ALL THE MISC. APPLICATIONS. WE HAVE ALREADY DISCUSSED AND DECIDED THE MISC. APPLICATION NO.106/LKW/2014 AND ACCORDINGLY ON THE SAME LINE, ALL THE REMAINING MISC. APPLICATIONS ARE ALSO DISMISSED. 1 2 . IN THE RESULT, ALL THE MISC. APPLICATIONS ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 6 /04/2015 *C.L.SINGH COPY OF THE O RDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A ) 5. DR, ITAT, LUCKNOW ASSTT. REGISTRAR