DCIT CIRCLE- 3 (3)(1), MUMBAI V. M/S SARTHAK INDUSTRIES LTD., MUMBAI

MA 278/MUM/2022

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT) as the appellant and M/s. Sarthak Industries Ltd. as the respondent. The dispute centered on the carry forward of a speculation loss amounting to Rs. 5,78,31,865 incurred by the assessee on commodity exchanges, which the assessee wanted to carry forward to set off against future speculation income. The original ITA No.36/M/2020 decision allowed this carry forward, subject to verification by the Assessing Officer (AO) and in accordance with the law. The Revenue's subsequent miscellaneous application argued that the Tribunal had inadvertently decided on an issue not challenged, seeking a recall of the order. However, the Tribunal found no error apparent on record and dismissed the application.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301206 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 02-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 29-09-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER MA No.278/M/2022 (Arising out of ITA No.36/M/2020) Assessment Year: 2014-15 DCIT, Circle-3(3)(1), Room No.609, 6 th Floor, Aayakar Bhava, M.K. Road, Mumbai – 400 020 Vs. M/s. Sarthak Industries Ltd., 302, Devkrupa Bldg., 28 Raichur Street, Nariman Point, Mumbai – 400 009 PAN: AABCA3214A (Appellant) (Respondent) Present for: Assessee by : Shri Bhupendra Shah, A.R. Revenue by : Ms. Vranda U Matkari, D.R. Date of Hearing : 03 . 03 . 2023 Date of Pronouncement : 21 . 03 . 2023 O R D E R Per : Kuldip Singh, Judicial Member: Heard : Revenue by filing present miscellaneous application sought to rectify the order dated 25.03.2022 passed by the Tribunal in ITA No.36/M/2020 on the ground that the Tribunal has inadvertently decided the issue for carry forward of speculation loss which was not challenged before the Tribunal and as such ground No.2 remains unadjudicated and sought to recall the order dated 25.03.2022 (supra) being error apparent on record. MA No.278/M/2022 (Arising out of ITA No.36/M/2020) M/s. Sarthak Industries Ltd. 2 2. We have perused the order dated 25.03.2022 (supra) passed by the Tribunal wherein ground No.2 raised by the Revenue has been duly decided by the Bench as per ground raised by returning following findings: “10. The assessee company has claimed adjustment of LTCL of Rs.3,13,21,338/- against the LTCG of the property sold during the year of Rs.7,58,23,341/- which the AO has disallowed on the ground that when the income includes loss, the loss is arising out of sale of shares/mutual funds which are subjected to STT also are not part of the total income and as such assessee is not entitled for adjustment of LTCL against its LTCG. 11. However, the Ld. CIT(A) decided this issue for statistical purposes by returning the following findings: “3.3.1 During the course of appellate proceedings, the authorised representative of the appellant discussed the grounds and subsequently made the written submissions. The relevant extract of the same corresponding to the above ground is reproduced as following:- "Direction for carried forward of speculation loss Rs.57831865/-. The assessee company shown speculation loss on commodity exchange during the year and claimed carried forward in the subsequent years profit, if any. The directions not issued by learned AO while computing the total income. The same may kindly be allowed for carried forward and oblige." 3.3.2 These grounds relate to carry forward of speculation loss of Rs.5,78,31,865/-. The AO is directed to verify the amount of speculation loss in accordance with law in consequence of this order subject to the condition that they may be allowed to be set-off only against any speculation income in future. These grounds are allowed for statistical purposes.” 12. When the assessee company has merely sought direction from the Ld. CIT(A) for allowing of carry forward of speculation loss of Rs.5,78,31,865/- on the commodity exchange during the year and claimed carry forward in the subsequent years’ profit, the Ld. CIT(A) has directed the AO to verify the amount of speculation loss in accordance with the law, if any speculation loss is there the same may be set off against any speculation income in the future. 13. Since the AO has been given the liberty to proceed as per law only to set off speculation loss that too in accordance with the law against any speculation income of the assessee in future, no ground is made out to interfere into the findings returned by the Ld. CIT(A), hence ground No.2 is also determined against the Revenue.” MA No.278/M/2022 (Arising out of ITA No.36/M/2020) M/s. Sarthak Industries Ltd. 3 3. Aforesaid findings returned by the Tribunal goes to prove that ground No.2 has been duly decided by the Bench as per ground rasied by the Revenue by upholding the findings returned by the Ld. CIT(A) who has given the AO liberty to proceed as per law only to set off speculation loss that too in accordance with law against any speculation income of the assessee in future, the miscellaneous application filed by the Revenue is misconceived, hence dismissed. The assessee has not filed any miscellaneous application on this issue. Order pronounced in the open court on 21.03.2023. Sd/- Sd/- (GAGAN GOYAL) (KULIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 21.03.2023. * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.