KETAN PRAVINCHANDRA KAMDAR, MUMBAI V. DCIT CEN CIR 7(3), MUMBAI

MA 134/MUM/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7470 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 28-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Business income; Business expenditure
• Section: 143(3); 153A; 195; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) M.A. NO. 134/MUM/2019 (ITA NO. 135/MUM/2016) ASSESSMENT YEAR: 2006 - 07 & M.A. NO. 135/MUM/2019 (ITA NO. 136/MUM/2016) ASSESSMENT YEAR: 2008 - 09 KETANPRAVINCHANDRAKAMDAR, 111, LOHABHAVAN, P.D. MELLO ROAD, CARNAC BUNDER, MUMBAI - 400009 VS. THE DCIT, CENTRAL CIRCLE - 7(3), MUMBAI. PAN NO. AABPK6092R APPELLANT RESPONDENT ASSESSEE BY : MR. PARESHSHAPARIA , AR REVENUE BY : MR. CHAITANYA ANJARIA, DR DATE OF HEARING : 26/04/2019 DATE OF PRONOUNCEMENT : 23/07/2019 ORDER PER N.K. PRADHAN, AM BY MEANS OF THESE MISCELLANEOUS APPLICATION S (MA), THE APPLICANT SEEKS RECALL OF THE ORDER DATED 21 .08.2018 PASSED BY THE ITAT H BENCH MUMBAI (ITA NO S . 135 /MUM/201 6 ) FOR THE ASSESSMENT YEAR S (AY) 2006 - 07 & (ITA NOS. 136 /MUM/2016 ) FOR AY 2008 - 09 . IN PART - I , HERE - IN - BELOW, WE MENTION THE CONTENTIONS OF THE LD. COUNSEL FOR THE KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 2 APPLICANT, IN PART - II, THE SUBMISSIONS OF THE LD. DR AND IN PART - III, THE REASONS FOR OUR DECISION. I 2. THE CONTENTIONS OF THE LD. COUNSEL FOLLOW THE WRITTEN SUBMISSION DATED 28.02.2019 FILED BY THE APPL ICANT BEFORE THE TRIBUNAL. THEREFORE, WE REFER BELOW THE SAID WRITTEN SUBMISSION. IT IS SUBMITTED THAT THE ITAT WHILE ADJUDICATING THE GROUND NO. 1 (AY 2006 - 07) AGAINST THE APPELLANT HAVE AT PAGE NO. 8 TO 11 AT PARA NO. 7.1 REFERRED AND DISCUSSED THE CASE LAWS RELIED UPON BY THE ASSESSEE, HOWEVER, NOT CONSIDERED THE PROPOSITIONS LAID DOWN THEREIN IN LIGHT OF THE FACTS OF THE CASE WHILE DRAWING THE CONCLUSION. IT IS STATED THAT THE ITAT AT PAGE NO. 11 TO 12 AT PARA NO. 7.2/7.3 HAS DRAWN A CONCLUSION THAT TH E ASSESSEE HAS ENTERED INTO REPETITIVE TRANSACTIONS IN TWO SCRIPTS NAMELY BHARTI SHIPYARD AND SAH PETRO (DETAILED AT PARA 7.3) OUT OF TOTAL FIVE SCRIPTS DEALT UNDER SHORT TERM CAPITAL GAINS AND CONCLUDED THAT THE SAME IS DONE IN A SYSTEMATIC AND ORGANIZED MANNER WHICH IS SINE QUA NON OF BUSINESS INCOME WITHOUT ASSIGNING ANY OF THE CHARACTERISTICS OF IT BEING SYSTEMATIC AND ORGANIZED MANNER. FOR AY 2008 - 09 IT IS STATED THAT THE ITAT AT PAGE NO. 11 AND 14 AT PARA NO. 7.2 AND 8 HAS DRAWN A CONCLUSION THAT THE ASSESSEE HAS ENTERED INTO REPETITIVE TRANSACTIONS IN FIVE SCRIPTS NAMELY GREAT OFFSHORE LTD., ORBITCO, JSW STEEL LTD., SESA GOA LTD. AND K.S. OILS LTD. (DETAILED AT PARA 8) OUT OF TOTAL 55 SCRIPTS DEALT UNDER SHORT TERM CAPITAL GAINS AND CONCLUDED THA T THE SAME IS DONE IN A SYSTEMATIC AND ORGANIZED MANNER KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 3 WHICH IS SINE QUA NON OF BUSINESS INCOME WITHOUT ASSIGNING ANY OF THE CHARACTERISTICS OF IT BEING SYSTEMATIC AND ORGANIZED MANNER. ALSO IT IS STATED THAT IN PAGE NO. 11 AT PARA 7.2, THE TRIBUNAL H AS RELIED ON NEW JEHANGIR VAKIL MILLS CO. LTD. V. CIT 49 ITR 137 (SC) DATED 10.04.1963 AND T.M.M. SANKARALINGA NADAR & BROS . 4 ITC 226 (MAD.) DATED 23.10.1929 WHICH HAD NEITHER BEEN RELIED UPON NOR REFERRED B Y THE CIT(DR), WHEREBY DRAWING CONCLUSION ON THE ISSUE OF DOCTRINE OF RES JUDICATA OR DOCTRINE OF ESTOPPEL WITHOUT CONSIDERING THE VARIOUS LATER SUPREME COURT JUDGMENTS AND ESPECIALLY THE JUDGMENT OF GOPAL PUROHIT REFERRED/FURNISHED BY THE APPELLANT. THE LD. COUNSEL SUBMITS THAT THE RULE OF UNIFORMITY IN TREATMENT AND CONSISTENCY OF THE APPELLANT OUGHT TO HAVE BEEN FOLLOWED CONSIDERING THE FACTS THAT IN APPELLANTS OWN CASE, WITH IDENTICAL FACTS OF REPETITIVE TRANSACTIONS, THE INCOME FROM SALE OF SHARES HAVE BEEN TREATED AS CAPITAL GAINS AN D NOT BUSINESS INCOME NAMELY (I) AY 2007 - 08 : (A) ORDER U/S 143(3) DATED 16.12.2009 PASSED BY THE ASSESSING OFFICER ACCEPTING THE STCG WITH REPETITIVE TRANSACTIONS AS CAPITAL GAINS, (B) ORDER U/S 153A R.W.S. 143(3) DATED 30.03.2014 PASSED BY THE SAME A SSESSING OFFICER TREATING THE STCG AS BUSINESS INCOME. THE CIT(A) ALLOWED THE APPEAL AND THE DEPARTMENT APPEAL WAS DISMISSED BY THE ITAT, (II) AY 2010 - 11 : ORDER U/S 153A R.W.S. 143(3) DATED 30.03.2014 PASSED BY THE SAME ASSESSING OFFICER, (III) AY 2011 - 12 : ORDER U/S 153A R.W.S. 143(3) DATED 30.03.2014 PASSED BY THE SAME ASSESSING OFFICER. THUS IT IS STATED THAT THE TRIBUNAL OUGHT TO HAVE CONSIDERED THE FACT THAT IN APPELLANTS OWN CASE, HAVING STCG WITH REPETITIVE KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 4 TRANSACTIONS IN OTHER ASSESSMENT YEA RS HAVE BEEN ACCEPTED AS STCG AND ALSO OUGHT TO HAVE FOLLOWED VARIOUS SUPREME COURT JUDICIAL PRONOUNCEMENTS ON THE PRINCIPLE OF UNIFORMITY AND CONSISTENCY. FINALLY, IT IS STATED THAT THE TRIBUNAL MAY PLEASE GIVE ONE MORE OPPORTUNITY TO THE APPELLANT TO PRESENT ITS CASE FOR NECESSARY ORDERS. II 3. ON THE OTHER HAND, THE LD. DR SUBMITS THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE IMPUGNED ORDER PASSED BY THE TRIBUNAL. HE SUBMITS THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER IN THE GARB OF SECTION 254(2) OF THE ACT. III 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. AT PARA 7.2 OF THE IMPUGNED ORDER, IT IS MENTIONED BY US THAT THE ASSESSEE HAS ENTERED REPEATEDLY IN THE SCRIPTS WHICH HE HAD ALREADY DISPOSED OFF AS LISTED AT PARA 7.3 AND 8 OF THE ORDER. AS THE SAME IS DONE IN A SYSTEMATIC AND ORGANIZED MANNER, WE HELD THAT THE CASE OF THE APPELLANT IS DISTINGUISHABLE FROM THE CASE LAWS RELIED ON BY THE LD. COUNSEL. FURTHER, REFERRING TO THE DECISION IN NEW JEHANGIRVAKIL MILLS V. CIT 49 ITR 137 (SC) AND SANAKARLINGA V. CIT 4 ITC 226, 241 (FB), WE OBSERVED THAT THE DOCTRINE OF RES JUDICATA OR ESTOPPEL BY RECORD DOES NOT APPLY TO AOS DECISIONS. A FINDING OR DECISION OF THE INCOME TAX AUTHORITIES IN ONE YEAR MAY BE DEPARTED FROM IN A SUBSEQUENT YEAR. KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 5 FOR AY 2006 - 07 WE FOUND THAT THERE ARE REPETITIVE TRANSACTIONS OF PURCHASE AND SALE BY THE ASSESSEE IN THE SCRIPTS OF BHARATI SHIPYARD AND SAH PETRO. THE DETAILS ARE AS UNDER : SR. NO. NAME OF THE COMPANY NO. OF SHARES DATE OF PURCHASE DALE OF SALE BOOK GAINS (RS.) 1 BHARATI SHIPYARD 1700 19.09.2005 28.09.2005 8410 2 BHARATI SHIPYARD 3300 19.09.2005 23.12.2005 - 72422 3 BHARATI SHIPYARD 2700 01.09.2005 23.12.2005 - 62534 4 BHARATI SHIPYARD 9000 11.11.2005 23.12.2005 173056 5. BHARATI SHIPYARD 3000 11.11.2005 31.01.2006 165405 6 SAH PETRO 45496 04.08.2005 04.08.2005 7632 7 SAH PETRO 323 05.08.2005 09.08.2005 147 8 SAH PETRO 11227 08.08.2005 09.08.2005 - 1348 9 SAH PETRO 25000 08.08.2005 11.08.2005 - 4917 10 SAH PETRO 11227 11.08.2005 12.08.2005 - 75590 11 SAH PETRO 460 11.08.2005 08.12.2005 - 8806 AS OBSERVED BY US, IN THE ABOVE CASE THE ASSESSEE HAS ENTERED REPEATEDLY IN THE ABOVE SCRIPTS, WHICH HE HAD ALREADY DISPOSED OFF AND THE SAME IS DONE IN A SYSTEMATIC AND ORGANIZED MANNER, WHICH IS SINE QUA NON OF BUSINESS INCOME. THEREFORE, WE CONFIRM ED TH E ORDER OF THE LD. CIT(A) TREATING THE AMOUNT OF RS.1,29,033/ - AS BUSINESS INCOME. HOWEVER, WE DIRECTED THE AO TO ALLOW THE RELATED BUSINESS EXPENSES ON THE ABOVE INCOME. KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 6 FOR AY 2008 - 09, WE MENTIONED THE REPETITIVE TRANSACTIONS OF SALE AND PURCHASE BY THE ASSESSEE IN THE SCRIPTS OF GREAT OFFSHORE LTD., ORBITCO, JSW STEEL LTD., SESA GOA LTD. AND K.S. OILS LTD. THESE ARE AS UNDER : SR. NO. NAME OF THE COMPANY NO. OF SHARES DATA OF PURCHASE DATE OF SALE BOOK GAINS (RS.) 1 GREAT OFFSHORE LTD 1000 24.11.2006 07.05.2007 432,257 2 GREAT OFFSHORE LTD 1000 24.11.2006 21.05.2007 404,666 3 GREAT OFFSHORE LTD 1000 21.12.2006 21.05.2007 5,636 4. GREAT OFFSHORE LTD 50 29.05.2007 18.06.2007 3639 5 GREAT OFFSHORE LTD. 200 30.05.2007 27.06.2007 12,267 6 GREAT OFFSHORE LTD. 800 30.06.2007 06.09.2007 55,524 7 ORBITCO 2000 25.04 2007 30.05.2007 131,064 E ORBITCO 1000 25.04.2007 22.06.2007 77,534 9 ORBIT CORP 1000 09.08.2007 06.09.2007 39,610 10 JSW STEEL LTD. 500 01.07.2007 10.07.2007 11,921 11 JSW STEEL LTD. 500 21.08.2007 03.10.2007 132,702 12 JSW STEEL LTD. 750 21.08.2007 10.10.2007 203,932 13 SESA GOA LTD. 250 27.08.2007 29.08.2007 26,296 14 SESA GOA LTD. 250 27.08.2007 03.10.2007 223,792 15 SESA GOA LTD. 250 11.09.2007 03.10.2007 158,104 16 SESA GOA LTD. 750 11.09.2007 05.10.2007 576,426 17 K.S OILS LTD. 5000 25.05.2007 30.10.2007 188,412 18 K.S OILS LTD. 5000 01.11.2007 14.12.2007 64,306 19 K.S OILS LTD. 5000 01.11.2007 28.12.2007 83,260 KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 7 20 K.S OILS LTD. 10000 01.11.2007 27.12.2007 191,499 AS THE TRANSACTIONS OF SALE/PURCHASE MADE BY THE ASSESSEE IN THE ABOVE SCRIPTS ARE REPETITIVE IN NATURE, WE CONFIRMED THE ORDER OF THE LD. CIT(A) TREATING THE AMOUNT OF RS.21,80,288/ - AS BUSINESS INCOME. HOWEVER, WE DIRECTED THE AO TO ALLOW THE RELATED BUS INESS EXPENSES ON THE ABOVE INCOME. 4.1 A PERUSAL OF THE ABOVE FACTS CLEARLY INDICATE THAT THE APPLICANT HAS NOT POINTED OUT ANY MISTAKE APPARENT FROM THE RECORD. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE AP PARENT FROM THE RECORD. THIS VIEW IS SUPPORTED BY THE DECISION OF THE HONBLE SUPREME COURT IN T.S. BALARAM, ITO V. VOLKART BROS ., (1971) 82 ITR 50 (SC), MASTER CONSTRUCTION CO. P. LTD. V. STATE OF ORISSA , AIR 1966 SC 1047, KARAM CHAND THAPAR & BROS. (COAL SALES) LTD. V. STATE OF U.P. (1976) TAX LR 1921, 1927 (SC) AND CCE V. ASCU LTD ., (2003) 9 SCC 230, 232. IN FACT, NOT A SINGLE ERROR IN THE IMPUGNED ORDER HAS BEEN POINTED OUT BY THE APPLICANT. WHAT THE APPLICANT WANTS IS A REVIEW OF THE ORDER PASSED BY TH E TRIBUNAL. THE TRIBUNAL IS A CREATURE OF THE STATUTE. THE TRIBUNAL CANNOT REVIEW ITS OWN DECISION UNLESS IT IS PERMITTED TO DO SO BY THE STATUTE. THE HONBLE SUPREME COURT HAS HELD IN PATEL NARSHI THAKERSHI V. PRADYUMANSINGHJI ARJUNSINGHJI [AIR 1970 SC 12 73] THAT THE POWER TO REVIEW IS NOT AN INHERENT POWER. IT MUST BE CONFERRED BY LAW KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 8 EITHER SPECIFICALLY OR BY NECESSARY IMPLICATION. IT IS A SETTLED LAW THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER IN THE GARB OF SECTION 254(2) OF THE ACT AS HELD IN C IT V. GLOBE TRANSPORT CORPN. [1992] 195 ITR 311 (RAJ) (HC), CIT V. ROOP NARAIN SARDAR MAL [2004] 267 ITR 601 (RAJ) (HC), CIT V. DEVILAL SONI [2004] 271 ITR 566 (RAJ) (HC), JAINARAIN JEEVRAJ V. CIT [1980] 121 ITR 358 (RAJ.) (HC), PRAJATANTRA PRACHAR SAMITI V. CIT [2003] 264 ITR 160 (ORISSA) (HC), CIT V. JAGABANDHU ROUL [1984] 145 ITR 153 (ORISSA) (HC), CIT & ANR. V. ITAT & ANR. [1992] 196 ITR 640 (ORISSA) (HC), SHAW WALLACE & CO. LTD. V. ITAT & OTHERS [1999] 240 ITR 579 (CAL) (HC), CIT V. SUMAN TEA & PLYWOOD INDUSTRIES PVT. LTD. [1997] 226 ITR 34 (CAL) (HC), ITO V. ITAT & ANR. [1998] 229 ITR 651 (PAT.) (HC), CIT & ANR. V. ITAT & ANR. [1994] 206 ITR 126 (AP) (HC), ACIT V. C. N. ANANTHRAM [2004] 266 ITR 470 (KAR) (HC). 5. IN VIEW OF THE FACTUAL SCENARIO AND POS ITION OF LAW DELINEATED HEREINBEFORE, THE PRESENT MA, BEING DEVOID OF MERIT, IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/07/2019. SD/ - SD/ - (C.N. PRASAD) (N.K. PRADHAN) JUDICIAL ME MBER ACCOUNTANT MEMBER MUMBAI ; DATED: 23/07/2019 RAHUL SHARMA, SR. P.S. KETANPRAVINCHANDRAKAMDAR MA NOS. 134 & 135/MUM/2019 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI