PRAMOD H LELE, V. ASST CIT 11(3),

MA 266/MUM/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4337 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2002-2003
• Appeal Filed On: 18-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAKASH L PATHADE
• Assessee Lawyers: RA JEEV WAGLAY
• Keywords: Capital asset
• Section: 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH , JM AND SHRI SANJAY ARORA, AM . / MA NO S . 266 & 267 /MUM/2015 (ARISING OUT OF ITA NO S . 5581/MUM/2004 & & 3691/MUM 2005 ) ( / ASSESSMENT YEAR S : 2002 - 03 & 2004 - 05 ) PRAMOD H. LELE, 5/7, CHANDRASHEKHAR CO - OP SOC., SWAMI NITYANAND ROAD, ANDHERI (E), MUMBAI - 400 069 / VS. ASST. CIT - 11(3), MUMB A I ./ ./ PAN/GIR NO. AAAPL 6012 B ( APPLICANT ) : ( RESPONDENT ) APPLICANT BY : SHRI RAJEEV WAGLAY RESPONDENT BY : SHRI PRAKASH L. PATHADE / DATE OF HEARING : 12.02.2016 / DATE O F PRONOUNCEMENT : 10 .0 5 .2016 / O R D E R PER SANJAY ARORA, A. M.: TH I S IS A SET OF TWO MISCELLANEOUS PETITION S BY THE ASSESSEE AGAINST THE ORDER U/S. 254(1) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) BY THE TRIBUNAL DATED 06.11.2015 IN ITS CASE FOR ASSESSMENT YEAR S (A.Y S .) 2002 - 03 & 2004 - 05 . 2. T HE ASSESSEE PER ITS INST ANT APPLICATIONS BRINGS FORTH WHAT IT C A L L S MISTAKES OR DISCREPANCIES IN THE IMPUGNED ORDER (VIDE PARAS 3 TO 12 THEREOF ), PRAYING FOR THE IR RECTIFICATION. WE SHALL CONSIDE R THEM IN SERIATIM, AS FOLLOWS. 2 MA NO S . 266 & 267 /MUM/2015 (A.Y. 2002 - 03 & 2004 - 05 ) PRAMOD H. LELE VS. ASST. CIT 3. WE HAVE HEARD THE PARTIES, AND GIVEN OUR CAREFUL CONSIDERATION TO THE MATTER AS WELL AS THE MATERIAL ON RECORD, ONLY TO FIND OURSELVES BEING NOT MOVED BY THE OBJECTIONS RAISED B Y THE ASSESSEE, WHICH WE FIND A S MISPLACED. 3.1 THE OBJECTION RAISED PER P AR A S 3 6 OF THE PETITIONS , I.E., TO THE EFFECT THAT THE DATE 27/2/1998 MENTIONED AT PARA 3 OF THE IMPUGNED ORDER IS NOT THE CORRECT DATE AND REQUIRES RECTIFICATION, WOULD NOT SURVIVE IN VIEW OF THE CORRIGENDUM ORDER DATED 16 .11. 2015 ISSUED BY THE B ENCH SUBSEQUENT TO THE IMPUGNED ORDER, RECTIFYING CERTAIN TYPOGRAPHICAL ERROR S AND/ OR APPARENT MISTAKES IN THE IMPUGNED ORDER , T HE COPY OF WHICH , ALREADY SENT TO THE ASSESSEE AS PER THE RECORDS , WAS NEVERTHELESS MADE AVAILABLE TO THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL. 3 .2 VIDE PARAS 7 AND 8 OF ITS A PPLICATION, THE ASSESSEE FINDS FAULT WITH THE OBSERVATION BY THE TRIBUNAL (AT PARA 4 ) THAT THE SEVERAL DECISIONS BY THE TRIBUNAL RELIED UPON BY THE ASSESSEE HA VE BEEN INCORRECTLY STATED BY IT AS HAVING BEEN RENDERED NOT CONSIDERING THE DECISION BY THE TRIBUNAL IN THE CASE OF ACIT VS. SHRIPAD S NADKARNI ( IN ITA NO. 4698/MUM/2004 DATED 2 0. 1 . 2009) AND IN ITS OWN ASSESSMENT FOR A.Y. 1998 - 99 ( IN ITA NO. 4699 / M UM/ 200 4 DATED 10 .8. 2011 ) . THE DECISIONS RELIED UPON BEING EARLIER IN TIME, MENTIONING TH EIR DATES ( BEING 16 . 10 . 2008, 14 .12. 2007 AND 3 0.1. 2009 ) , COULD NOT POSSIBL Y HAVE RELIED UPON THE LATER DECISIONS . ON THIS BASIS , IT IS FIRSTLY STATED THAT THE SAID OBSERVATION IS NOT CORRECT. TOWARD THIS, WE MAY FIRSTLY REPRODUCE THE RELEVANT SUB PARA (OF PARA 4 ), ALSO BEING THE SUBJECT MATTER OF P ARAS 9 - 12 OF THE ASSESSEES APPLICATION, AS UNDER: IN SO HOLDING, RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF SUMMIT BHATTA CHARYA VS. ASST. CIT [2008] 112 ITD 1 (MUM) (SB) AND SHRIPAD S. NADKARNI (IN ITA NO. 4698/MUM/2004 DATED 20.01.2009). THE ASSESSEES RELIANCE ON THE DECISION IN BOMI S. BILLIMORIA VS. ASST. CIT (IN ITA NO. 2120/MUM/1998 DATED 30.06.2009), A SUBSEQUENT DECI SION, WAS ALSO MET BY IT (REFER PARAS 15 - 19 OF ITS ORDER). THE ASSESSEE HAS ALSO BEFORE US RELIED ON SEVERAL DECISIONS BY THE TRIBUNAL. SO, HOWEVER, HE HIMSELF ADMITS TO THE SAME 3 MA NO S . 266 & 267 /MUM/2015 (A.Y. 2002 - 03 & 2004 - 05 ) PRAMOD H. LELE VS. ASST. CIT BEING WITHOUT REFERENCE TO THE DECISION BY THE TRIBUNAL IN THE CASE OF SHRIPA D S. NADKARNI (SUPRA) AND HIMSELF (SUPRA) (REFER PARA 6 OF THE WRITTEN SUBMISSIONS DATED 21.11.2013), EVEN AS FOUND EARLIER BY THE TRIBUNAL IN THE ASSESSEES OWN CASE VIDE ITS ORDER DATED 10.8.2011 FOR A.Y. 1998 - 99 WITH REFERENCE TO THE RELIANCE BY THE ASS ESSEE ON THE DECISION IN BOMI S. BILLIMORIA (SUPRA). THE SAID DECISION BY THE TRIBUNAL IN THE ASSESSEES OWN CASE CAN THUS BE SAID AS COVERING THE PRESENT CASE AS WELL. THE DECISIONS RELIED UPON ARE TO THE EFFECT THAT THE RIGHT VESTING IN THE ASSESSEE IS A CAPITAL ASSET. THE SAME IS IN FACT NOT DENIED; RATHER, CONFIRMED. THE QUESTION, HOWEVER, IS A POINT OF TIME WHEN THE SAID RIGHT VESTS IN THE ASSESSEE, AND WHICH WE HAVE FOUND TO BE ON THE EXERCISE OF THE OPTION/S, LEADING TO A LEGALLY ENFORCEABLE RIGHT, W HICH IN FACT REPRESENTS SETTLED LAW. THIS PRINCIPLE ALSO EMANATES FROM THE DECISION IN THE CASE OF CIT VS. BHARAT V. PATEL (TAX APPEAL NO. 14 OF 2004 AND OTHERS DATED 23.12.2014), AS WELL AS BY THE HONBLE APEX COURT IN CIT VS. INFOSYS TECHNOLOGY LTD. [200 8] 297 ITR 167 (SC). THE DECISION IN BHARAT V. PATEL (SUPRA), RENDERED UPON CONSIDERATION OF INFOSYS TECHNOLOGY LTD. (SUPRA), IN - AS - MUCH AS IT CONFIRMS THE INCOME RECEIVED ON THE REDEMPTION OF THE STOCK APPRECIATION RIGHTS AS CAPITAL GAINS, IS CONSISTENT W ITH AND, IN FACT, SUPPORTS THE CASE OF THE REVENUE. THE ISSUE AT LARGE CAN THUS BE SAID TO BE PRINCIPALLY FACTUAL, I.E., DETERMINATION OF THE TIME, BASED ON THE CONTRACTUAL RELATIONSHIP AND OTHER INCIDENTS, WHEN THE RIGHT, A CAPITAL ASSET, VESTS IN THE ASS ESSEE. AS EVEN OTHERWISE APPARENT, THE SAID SUB - PARA IS FIRSTLY TO BE READ AS A WHOLE; RATHER, IN CONTINUATION WITH THE FOREGOING ( SUB ) PARAS OF THE RELEVANT PARA (PARA 4 ) OF THE IMPUGNED ORDER, WHICH SETS OUT THE TRIBUNALS DECISION. TRUE, TWO OF THE TH REE DECISIONS RELIED UPON WERE OF D ATES PRIOR TO THE DECISION BY THE TRIBUNAL IN THE ASSESSEES OWN CASE (SUPRA) AS WELL AS SHRIPAD S NADKARNI ( SUPRA ), AND COULD NOT POSSIBLY HAVE BE EN REFERRED TO THEREIN. THE STATEMENT IS THUS VALID QUA ONE DECISION (DTD. 30.1.2009). T WO, DOES IT CHANGE THE FACT THAT THE TWO SETS OF DECISIONS ARE RENDERED INDEPENDENT OF EACH OTHER, WHICH IS WHAT THE TRIBUNAL STATES IN SUBSTANCE . IN FACT, THE TRIBUNAL IN THE ASSESSEES CASE FOR A.Y. 19 98 - 99 EXTENSIVELY DISCUSSES, BESIDES TH E FACT S , THE ASSESSEES RELIANCE ON DECISIONS CITED I N ITS FAVOUR, PARTICULARLY IN THE CASE OF BOMI S. BILLIMORIA VS. ASST. CIT (IN ITA NO. 2120/MUM/1998 DATED 30.06.2009), RE PRESENTING THE OTHER VIEW. ONCE THE OTHER VIEW IS CONSCIOUS LY CONSIDERED, WOULD IT MATTER WHETHER THE SAME IS STATED IN ONE OR MORE DECISIO N BY THE 4 MA NO S . 266 & 267 /MUM/2015 (A.Y. 2002 - 03 & 2004 - 05 ) PRAMOD H. LELE VS. ASST. CIT TRIBUNAL? THE SAID DECISION IS CONSIDERED BY IT AS DISTINGUISHABLE FOR MORE THAN ONE REASON ; TH E VARIOUS DIFFERENCES BETWEEN THE M BEING DISCUSSED AT P ARAS 14 19 OF THE TRIBUNALS ORDER (FOR A.Y. 19 98 - 99), WHICH THE TRIBUNAL NOTES (AT PARA 4 ) . RATHER, THE TRIBUNAL IN THE INSTANT CASE, IN VIEW OF THE CONFLICTING DECISIONS, PROCEEDED INDEPENDENTLY, ONLY TO FIND ITS FINDINGS OF FACT (RENDERED AT PARA 4 ) AS DECISIVE OF THE MATTER AND, FURTHE R, IN FULL AGR EEMENT WITH THE DECISION BY IT IN THE ASSESSEES OWN CASE FOR A PRECEDING YEAR. IT IS THIS THAT PROPELS IT TO SAY THAT THE SAID EARLIER DECISION IN THE ASSESSEES CASE (A.Y. 1998 - 99) COULD BE CONSIDERED AS FULLY COVERING THE PRESENT CASE A S W ELL. THE TR IBUNAL ( I N THE SAID PARA 4 ) FURTHER STATES THE DISTINGUISH ABLE ASPECTS OF THE OTHER DECISION S , REPRESENTING THE OTHER VIEW . IT CONCLUDES BY STATING THAT THE ISSUE UNDER REFERENCE IS PRIMARILY FACTUAL, I.E., THE DETERMINATION OF TIME, BASED ON CO NTRACTUAL RELATIONSHIP AND OTHER INCIDENTS , WHEN THE RIGHT , A CAPITAL ASSET, VESTS IN THE ASSESSEE. THE TR IBUNAL IN THE ASSESSEES CASE FOR A.Y. 19 98 - 99, SIMILARLY , STATES THAT IT IS NOT THE DATE OF GRANT OF OPTION, BUT THE DATE OF ITS EXERCISE, THAT IS RELEVANT AND MATERIAL. HOW COULD , THEN, THE ASSESSEE, UNLESS IT IMPUGNS THE FACTUAL FINDINGS O R THE BASIS ON WHICH THE SAME STAND ARRIVED AT , ASSAIL THE IMPUGNED ORDER, AND NEITHER DO WE FIND IT AS QUESTIONING THE ISSUE AT LARGE, AS DELINEATED AND FORMULA TED BY THE TRIBUNAL, AND WHICH THEREFORE IT PROCEEDS TO DECIDE. 3 .3 THE NEXT PARAS, I.E., 9 THROUGH 12, REFER TO THE RELIANCE BY THE TRIBUNAL, IN SUPPORT OF ITS DECISION, I.E., BY THE HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BHARAT V PATIL ( T AX A PPEAL NO. 14 OF 2004 DATED 23 .12. 2004 ) AS WELL AS BY THE HON BLE APEX COURT IN CIT V S . INFOSYS T ECHNOLOGIES LTD . [ 2008 ] 297 ITR 167 ( SC ) . THE ASSESSEE STATES OF THE SAID DECISIONS AS HAV E DECID ED THE ISSUE IN THE FAVOUR OF THE ASSESSEE S STAND. WE ARE UNA BLE TO AGREE . IT IS NOT THE POINT OF LAW WHICH I S IN ISSUE; THE DIFFERENCE LYING I N THE FACTS AND THEIR APPRECIATION. THE REFERENCE TO THE DECISION IN INFOSYS TECHNOLOGIES LTD. (SUPRA) , FOLLOWED IN BHARAT V. PATIL (SUPRA), IS ONLY FOR THE 5 MA NO S . 266 & 267 /MUM/2015 (A.Y. 2002 - 03 & 2004 - 05 ) PRAMOD H. LELE VS. ASST. CIT PRINCIPLE INVOLVE D, I.E., THE GAIN IS NOTIONAL IN THE ABSENCE OF EXERCISE OF OPTIONS , AND IS TO BE RECKONED ONLY THEREUPON. E NDORSING CLEARLY, WHAT STAND S ST ATED BY THE TRIBUNAL. 3. 4 IN VIEW OF THE FOREGOING, WE FIND NO MERIT IN THE ASSESSEES APPLICATIONS, AND DISMISS T HE SAME ; THE TRIBUNAL ON THE EARLIER OCCASION AS WELL AS FOR THE CURRENT YEAR CONSIDERING THE ISSUE ON MERITS, DISTINGUISHING THE CASE LAW RELIED UPON . T HE RELIANCE BY THE ASSESSEE ON THE DECISION IN CIT VS. GODAVARI SARAF [1978] 113 ITR 589 (BOM) IS THUS MISPLACED, AS ALSO LEGALLY SO , IN VIEW OF THE DECISION IN CIT VS. THAN A ELECTRICITY SUPPLY LTD. [19 9 4] 206 ITR 727 (BOM). THE LAW IS WELL SETTLED WITH REGARD TO A REVIEW BEING NOT PERMISSIBLE U/S. 254(2). WE MAY THOUGH TOWARD THE SAME ADVERT TO THE DECISIONS IN THE CASE OF CIT V. RAMESH ELECTRIC & TRADING CO . 1993] 203 ITR 497 (BOM) AND CORROSION ROADLINES V. DY. CIT [2005] 92 ITD 181 (PUNE) (TM), ELUCIDATING THE LAW IN THE MATTER. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES MISCELLANEOUS APPLICATION S ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MA Y 10 , 201 6 SD/ - SD/ - ( JOGINDER SINGH ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 10 . 0 5 .201 6 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APP LIC ANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE 6 MA NO S . 266 & 267 /MUM/2015 (A.Y. 2002 - 03 & 2004 - 05 ) PRAMOD H. LELE VS. ASST. CIT / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI