KENNETH DSAUSA ( LEGAL HEIR OF MR LANCE N DSAUSA), V. ADDL CIT RG 19(3),

MA 124/MUM/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3652 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 03-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G N MAKWANA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER MA NO.124/M/2015 (ARISING OUT OF ITA NO.865/M/2012 DATE OF DECISION: 06.02.2015) ASSESSMENT YEAR: 2008-09 MR. KENNETH DSOUSA (LEGAL HEIR OF MR. LANCELOT NORMAN DSOUSA), FLAT NO.4, PLOT NO.56, HILL ROAD, BANDRA (WEST), MUMBAI 400 050 PAN: AAAPD 5070H VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE 19(3), MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI HARIDAS BHAT, A.R. REVENUE BY : SHRI G.N. MAKWANA, D.R. DATE OF HEARING : 09.10.2015 DATE OF PRONOUNCEMENT : 09.10.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN MOV ED BY THE ASSESSEE UNDER SECTION 254(2) OF THE ACT STATING THAT AN ERR OR APPARENT ON RECORD HAS OCCURRED IN ORDER DATED 06.02.2015 OF THIS TRIBUNAL PASSED IN ITA NO.865/M/2012. THE ISSUE RAISED BEFORE THE TRIBUNA L WAS WHETHER THE INCOME OF THE ASSESSEE FROM A SALE OF SHARES WAS TO BE ASS ESSED AS BUSINESS INCOME OR AS CAPITAL GAINS. THE TRIBUNAL VIDE IMPUGNED ORDER , AFTER DETAILED DISCUSSION ABOUT THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE, HAS UPHELD THE ACTION OF THE LOWER AUTHORITIES IN TREATING THE ASSESSEE AS A TRA DER IN THE SHARES AND THE INCOME EARNED FROM SHARE TRANSACTIONS AS BUSINESS I NCOME. IN THIS BACKGROUND, THE ASSESSEE NOW THROUGH THE MISCELLANE OUS APPLICATION HAS PLEADED THAT THE TRIBUNAL HAS OVERLOOKED THE FACT T HAT THE ASSESSEE WAS AN MA NO.124/M/2015 (ARISING OUT OF ITA NO.865/M/2012) MR. KENNETH DSOUSA (LEGAL HEIR OF MR. LANCELOT NOR MAN DSOUSA) 2 INVESTOR FOR A LONG PERIOD, HE HAD CONVERTED HIS IN VESTMENT INTO STOCK IN TRADE ONLY DURING THE A.Y. 2007-08 AND THAT THE TRIBUNAL HAS ALSO IGNORED THE ARGUMENTS PUT-FORTH BY THE LD. A.R. REGARDING THE C HANGE OF CIRCUMSTANCES JUSTIFYING THE ACTION OF THE ASSESSEE IN TREATING H IS STOCK IN TRADE AS INVESTMENTS. IT HAS BEEN FURTHER PLEADED THAT IT H AS BEEN MENTIONED IN THE ORDER THAT THE ASSESSEE WAS SEEKING BENEFIT BY CHANGING T HE STAND, HOWEVER, THE ASSESSEE REALLY WAS NOT GETTING ANY BENEFIT. 2. WE HAVE HEARD THE RIVAL CONTENTIONS. WE HAVE AL SO GONE THROUGH THE ORDER OF THE TRIBUNAL DATED 06.02.15. WE FIND THAT THE TRIBUNAL HAS DISCUSSED IN DETAIL THE CONTENTIONS RAISED BY THE LD. A.R. DU RING THE ARGUMENTS. SO FAR AS THE FACT THAT PRIOR TO A.Y. 2007-08 THE ASSESSEE HA D TREATED HIMSELF AS AN INVESTOR IS FOUND MENTIONED IN PARA 4 OF THE ORDER IN FOLLOWING LINES: IT WAS ALSO SUBMITTED THAT ASSESSEE WAS ESSENTIALL Y AN INVESTOR. HE WAS TREATED AS AN INVESTOR FOR THE ASSESSMENT YEAR 2006 -07. HOWEVER, FOR THE ASSESSMENT YEAR 2007-08 ONLY, THE ASSESSEE HAD DECL ARED THE LOSS FROM SHARE TRANSACTIONS AS BUSINESS LOSS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD TREATED HIMSELF AS INVESTOR. 3. SO FAR AS THE SECOND ISSUE AS RELATING TO CHANGE OF CIRCUMSTANCES IS CONCERNED, AS PER THE CHART RELIED UPON BY THE LD. A.R., HE HAS PLEADED THE FOLLOWING CIRCUMSTANCES FOR CHANGE OF STOCK IN TRAD E INTO INVESTMENT BY THE ASSESSEE: 1. ADVANCED AGE OF THE ASSESSEE (85 YEARS) 2. LIVING BY HIMSELF AFTER THE MIGRATION OF ALL C HILDREN 3. MARKET CONDITIONS PROMPTED HIM TO WITHDRAW FRO M MARKET. 4. SALES ARE SUBSTANTIALLY HIGH AND PURCHASES ARE LESS. 5. SHIFTED THE INVESTMENT INTO SAFE FIXED DEPOSIT S. 4. HOWEVER, WE FIND THAT THE TRIBUNAL IN THE IMPUGN ED ORDER HAS THOROUGHLY DISCUSSED THE CONTENTIONS PUT-FORWARDED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) AS WELL AS BEFORE THE LD. CIT(A). IN PARA 4 OF THE ORDER THE CONTENTIONS RAI SED BY THE ASSESSEE BEFORE THE AO AND THE FINDINGS OF THE AO THEREUPON HAVE BEEN T HOROUGHLY DISCUSSED. WE MA NO.124/M/2015 (ARISING OUT OF ITA NO.865/M/2012) MR. KENNETH DSOUSA (LEGAL HEIR OF MR. LANCELOT NOR MAN DSOUSA) 3 FURTHER FIND FROM THE ASSESSMENT ORDER AS WELL AS O F THE ORDER OF THE LD. CIT(A) THAT NO SUCH FACTS AND CIRCUMSTANCES WERE EVER PUT BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. THE CONTENTIONS RAISED BY THE A SSESSEE BEFORE THE LOWER AUTHORITIES WERE DIFFERENT WHICH HAVE BEEN THOROUGH LY DEALT WITH AND ITEM WISE COMMENTED UPON BY THE LOWER AUTHORITIES. THE CONTE NTION OF THE LD. A.R. OF THE ASSESSEE THAT THE TRIBUNAL HAS MENTIONED IN PAR A 6 OF THE ORDER THAT THE ASSESSEE HAD NOT SHOWN ANY CHANGE OF CIRCUMSTANCES WHICH MAY JUSTIFY THE STAND OF THE ASSESSEE THAT THE INCOME FOR THE Y EAR UNDER CONSIDERATION IS TO BE TREATED AS INVESTMENT, HENCE, THE FACTS AND CIRCUMSTANCES PLEADED BY THE ASSESSEE HAVE BEEN IGNORED, IN OUR VIEW, HAS NO FORCE. THE ABOVE REPRODUCED OBSERVATION OF THE TRIBUNAL IS WITH REGA RD TO THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES WHEREIN THE ASSESSEE HAD NOT SHOWN ANY CHANGE OF CIRCUMSTANCES TO JUSTIFY ITS STAND OF CONVERTING TH E BUSINESS INCOME INTO CAPITAL GAINS. THE TRIBUNAL AFTER DISCUSSION OF THE FINDIN GS OF THE LOWER AUTHORITIES HAS OBSERVED THAT THERE WERE SO MANY CIRCUMSTANCES WHICH SHOW THAT THERE WAS NO CHANGE OF PATTERN IN THE ACTIVITIES OF THE ASSES SEE. THE TRIBUNAL, WHILE CONSIDERING THE OVERALL CIRCUMSTANCES OF THE CASE S UCH AS NUMEROUS SALE AND PURCHASE TRANSACTIONS AND THAT NOT ONLY THE VALUE B UT ALSO THE QUANTITY AND THE DIVERSITY OF THE SHARES WERE VERY HIGH AND THAT THE ASSESSEE IN THE PRECEDING YEAR HAS TREATED THE SHARES AS STOCK IN TRADE, HAS HELD THAT THERE WAS NO PLAUSIBLE JUSTIFICATION FOR THE ASSESSEE TO TREAT T HE SAID SHARES AS INVESTMENT DURING THE YEAR UNDER CONSIDERATION. THE TRIBUNAL HAS GIVEN THE FINDING THAT THE LD. A.R. OF THE ASSESSEE COULD NOT POINT OUT AN Y JUSTIFIABLE REASON FOR CONSIDERING THE ACTIVITY OF THE ASSESSEE IN SHARE T RANSACTION AS INVESTMENT. THE ABOVE CIRCUMSTANCES PUTFORTH BY THE LD. A.R., THUS, WERE LOOKED INTO AND WERE NOT FOUND TO BE JUSTIFIABLE FOR TREATING THE ASSESS EE AS AN INVESTOR FOR THE YEAR UNDER CONSIDERATION. UNDER SUCH CIRCUMSTANCES, THE RE IS NO FORCE IN THE CONTENTION OF THE LD. A.R. THAT HIS ARGUMENTS WERE NOT LOOKED INTO WHILE DECIDING THE APPEAL. MOREOVER, THIS TRIBUNAL HAS N O JURISDICTION TO REVIEW ITS MA NO.124/M/2015 (ARISING OUT OF ITA NO.865/M/2012) MR. KENNETH DSOUSA (LEGAL HEIR OF MR. LANCELOT NOR MAN DSOUSA) 4 ORDER. THE ARGUMENTS PUTFORTH BY THE LD. A.R. ARE NOT RELATING TO ANY MISTAKE APPARENT ON RECORD IN THE ORDER. THE LD. A.R. HAS SOUGHT TO REARGUE THE CASE ON MERITS WHICH CANNOT BE DONE UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. EVEN, THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF COMMISSIONER OF INCOME-TAX VS RAMESH ELECTRIC AND TRADING CO. 1993 203 ITR 497 (BOM.), WHILE RELYING UPON THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF T. S. BALARAM, ITO V. VOLKART BROTHERS [1971] 82 ITR 50 AND FURTHER RELYING UPON THE DECISIONS OF THE VARIOUS HIGH COURTS HAS C ATEGORICALLY HELD THAT THE POWER OF RECTIFICATION UNDER SECTION 254(2) OF THE INCOME-TAX ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS AND PATENT; MISTAKE WHICH IS APPARENT FROM THE REC ORD, AND NOT A MISTAKE WHICH REQUIRES TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FAILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE REC ORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT AND UNDER SUCH CIRCUMSTANCES THE TRIBUNAL HAS NO JURISDICTION UNDER SECTION 254(2) TO PASS THE SECON D ORDER. 5. IN VIEW OF OUR ABOVE OBSERVATIONS AND THE LEGAL POSITION AS STATED ABOVE, WE DO NOT FIND ANY MERIT IN THIS APPLICATION AND TH E SAME IS ACCORDINGLY HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2015. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 15.10.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT MA NO.124/M/2015 (ARISING OUT OF ITA NO.865/M/2012) MR. KENNETH DSOUSA (LEGAL HEIR OF MR. LANCELOT NOR MAN DSOUSA) 5 THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.