ACIT CEN CIR 33, V. ASHA V. MEHTA,

MA 433/MUM/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7295 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 07-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim
• Section: 69C; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, MUMBAI. BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND PRAMOD KUMAR, ACCOUNTANT MEMBER M.A.NO.433/MUM/2010 (ARISING OUT OF I.T.A NO.4776/ MUM/2008) ASSESSMENT YEAR: 2003-04 ASST. COMMISSIONER OF INCOME TAX, .. APPELLANT CENTRAL CIRCLE-33, MUMBAI,. VS ASHA V MEHTA, .. RESPONDENT A-119, SATYAM SHOPPING CENTRE, M.G.ROAD, GHATKOPER(E), MUMBAI-400077 PA NO.ACPPM 9115 R APPEARANCES: C.G.K. NAIR, FOR THE APPELLANT RAKESH JOSHI, FOR THE RESPONDENT DATE OF HEARING : 4.11.2011 DATE OF PRONOUNCEMENT : 4 -11-2011 O R D E R PER PRAMOD KUMAR: 1. THIS IS A RECTIFICATION PETITION IN RESPECT OF O RDER DATED 8 TH MARCH, 2010. , IN THE MATTER OF ASSESSMENT UNDER SECTION 1 43(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2003- 04. THE PETITION, M.A.NO.433/MUM/2010 ASHA V MEHTA, 2 INTER ALIA, STATES AS FOLLOWS: THE ITAT HAS, VIDE ORDER DTED 8.3.2010 IN RESPECT OF THE ASSESSMENT ORDER U/S.143(3) R.W.S. 153A FOR A.Y. 20 03-04, SET ASIDE THE FIRST ISSUE RELATING TO THE ADDITION OF RS.1,44,01, 601 ON ACCOUNT OF BOGUS LONG TERM CAPITAL GAINS SHOWN TO HAVE EARNED BY THE ASSESSEE ON SALE OF SHARES OF A COMPANY, M/S. DATABASE FINANCE LTD., AND IN RESPECT OF THE SECOND ISSUE RELATING TO ADDITION U/S.69C OF RS.7,20,080 @ 5% OF THE TOTAL TRANSACTION OF RS.1,44,01,601 BY TREATING THE TRANSACTION AS BOGUS, THE ITAT HAS DELETED THE ISSUE. HOWEVER, WHILE DECIDING THE FIRST ISSUE, THE HONB LE ITAT HAS NOT TAKEN COGNIZANCE OF THE DISCUSSION CONTAINED IN PAR A 1.8(III) OF THE ORDER OF THE LD CIT(A) I.E. THE SHARES OF MS. DFL W ERE OF THE FACE VALUE OF RS.10/- UPTO 26.2.2001 AND ON THAT DATE, SHARES WERE SPLIT INTO SHARES WITH FACE VALUE OF RS.1/ . SINCE BOTH M/S. GRPBL THE BROKER FROM WHOM THE ASSESSEE CLAIMED TO HAVE PURCHASED TH E SHARES, AND M/S. DFL HAVE DENIED THAT THEY HAVE CARRIED OUT ANY TRANSACTIONS WITH THE ASSESSEE AND SINCE IT IS NOT POSSIBLE TO PURCHA SE SHARE WITH FACE VALUE OF RS.10/- FROM THE STOCK EXCHANGE ON 4.5.200 1, THE CLAIM OF THE ASSESSEE THAT SHARES PURCHASED ON 4.5.2001 AND TRAN SFERRED THE SHARES IN HER NAME IS A BOGUS CLAIM. THEREFORE, THIS IS A MISTAKE APPARENT FROM THE RECORD WHICH SHOULD BE BROUGHT TO THE NOTI CE OF THE ITAT. ALSO, IN RESPECT OF THE SECOND ISSUE, THE HONBLE ITAT HAS HELD THAT IN CASE OF SEARCH, ADDITION CAN ONLY BE MADE ON TH E BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH. THE ITAT HAS H ELD THAT THE ADDITION MADE BY THE AO WAS WITHOUT ANY BASIS, AND HAS DELET ED THE ADDITION. IN THIS CONTEXT, IT MAY BE MENTIONED THAT THE ADDI TION U/S.69C HAS BEEN KNOCKED OFF BY THE HONBLE ITAT ON A GROUND W HICH IS NOT SUBSTANTIATED FROM THE PROVISIONS CONTAINED IN SECT ION 143(3) R.W.S. 153A. IT APPEARS THAT THE ITAT HAS ERRED ON THIS C OUNT BY REFERRING TO THE LEGAL POSITION IN RESPECT OF SECTION 158BC/BD W HEREAS IN THE PRESENT CASE, THE ASSESSMENT ORDER WAS PASSED U/S.1 43(3) R.W.S. 153A OF THE I.T.ACT, 1961. CONSIDERING THE ABOVE MENTIONED FACTS AND THE HUGE TAX IMPLICATIONS, IT IS PRAYED THAT THE ORDER DTD.8.3.2 010 OF THE HONBLE ITA A BENCH MAY BE MODIFIED ACCORDINGLY. 2. SHRI C.G.K. NAIR, LEARNED DEPARTMENTAL REPRESENT ATIVE, FAIRLY INVITES OUR ATTENTION TO HONBLE BOMBAY HIGH COURTS JUDGME NT DATED 22ND SEPTEMBER, 2011, WHEREIN, THEIR LORDSHIPS HAVE DECL INED TO ADMIT REVENUES APPEAL AGAINST THE TRIBUNAL ORDER ON THE GROUND THAT COUNSEL M.A.NO.433/MUM/2010 ASHA V MEHTA, 3 ON BOTH SIDES STATE THAT, IN VIEW OF THE FACT THE I NCOME TAX APPELLATE TRIBUNAL BY THE IMPUGNED ORDER DATED 8 TH MARCH, 2010 HAS RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO A SCERTAIN WHETHER 1,65,000 SHARES OF DFL LIMITED HAD BEEN GENUINELY P URCHASED BY THE ASSESSEE FROM THE SHARE BROKER ON 4 TH MARCH, 2001, IT IS NOT NECESSARY TO ENTERTAIN THE PRESENT APPEAL. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ONCE IT IS AN AGREED PO SITION OF THE PARTIES BEFORE HONBLE HIGH COURT, THE MATTER SHOULD STAND REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING BONAFIDES AND G ENUINENESS IN ENTIRETY, AND NOT ON THE LIMITED ASPECT OF VERIFICATION AS ST ATED IN THE TRIBUNALS ORDER. HE, ACCORDINGLY, PRAYS FOR MODIFICATIONS OF OUR DIRECTIONS. LEARNED DEPARTMENTAL REPRESENTATIVE PLACES VEHEMENT RELIANC E ON THE AVERMENTS AND PRAYERS MADE IN THE RECTIFICATION PETITION. 3. SHRI JOSHI, LEARNED COUNSEL FOR THE ASSESSEE, ST RONGLY OPPOSES THE RECTIFICATION PETITION. IT IS HIS CONTENTION THAT ONCE HONBLE HIGH COURT HAS ADJUDICATED ON REVENUES APPEAL AGAINST THE TRI BUNALS ORDER DATED 8 TH MARCH, 2010, THE SAID ORDER STANDS MERGED WITH HON BLE HIGH COURTS ORDER, AND, THEREFORE, WE ARE DENUDED OF THE POWERS TO RECTIFY OR OTHERWISE TINKER WITH OUR ORDER. HE PLACES RELIANCE ON TRIBU NALS DECISION, IN THE CASE OF DDIT VS. SET SATELLITE (SINGAPORE) PTE LTD (MA NO.29/MUM/2009), ORDER DATED 13.8.2010), WHEREIN, T HE COORDINATE BENCH, SPEAKING THROUGH ONE OF US (I.E. THE ACCOUNT ANT MEMBER) HAS HELD THAT THE ORDER OF THE TRIBUNAL HAVING MERGED IN THE ORDE R PASSED BY HONBLE HIGH COURT, WE ARE DENUDED OF THE POWERS TO TINKER WITH THE SAME . WE ARE THUS URGED TO DISMISS THE RECTIFICATION P ETITION. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, PERUSE D THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE AS ALSO THE APPLICABLE LEGAL POSITION. M.A.NO.433/MUM/2010 ASHA V MEHTA, 4 5. WE FIND THAT HONBLE HIGH COURT, WHILE DEALING W ITH REVENUES APPEAL AGAINST THE IMPUGNED TRIBUNALS ORDER, NOTED THAT COUNSEL ON BOTH SIDES STATE THAT, IN VIEW OF THE FAT THE INCOME TAX APPEL LATE TRIBUNAL BY THE IMPUGNED ORDER DATED 8 TH MARCH, 2010 HAS RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO ASCERTAIN WHETHER 1,65,000 SHARES OF DFL LIMITED HAD BEEN GENUINELY PURCHASED BY THE ASS ESSEE FROM THE SHARE BROKER ON 4 TH MARCH, 2001 AND DISPOSED OF THE APPEAL WITH THE LIBERTY TO THE PARTIES TO CANVAS THEIR ARGUMENTS ON THE ABOVE ISSUE BEFORE THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, AND HAVING NOTED THAT THE ISSUE IS NOW BEFORE THE ASSESSING OF FICER, WE FIND THAT THE RECTIFICATION PETITION IS INDEED UNSUSTAINABLE IN L AW. THE ORDER PASSED BY THE HONBLE HIGH COURT STANDS MERGED IN THE TRIBUNA LS ORDER, AND IT CANNOT INDEED BE OPEN TO US TO TINKER WITH THE SAME . IN ANY EVENT, THE ISSUE IS AS OBSERVED BY HONBLE HIGH COURT, OPEN FO R ADJUDICATION BEFORE THE ASSESSING OFFICER HIMSELF WHO IS PETITIONER B EFORE US. THE RECTIFICATION PETITION, ACCORDINGLY, DOES NOT CALL FOR ANY ADJUDICATION ON THE QUESTION OF GENUINENESS, AS IS AGITATED IN THE PETITION. THE ONLY OTHER ISSUE RAISED IN THIS PETITION IS ON THE QUESTION OF SCOPE OF SECTION 153A AND WHETHER EVEN IN THE ABSENCE OF ANY MATERIAL FOU ND IN SEARCH, ADDITION U/S. 69C CAN BE MADE IN THE COURSE OF ASSESSMENT U /S.143(3) R.W.S. 153A. THIS GRIEVANCE, EVEN IF BE CORRECT, IS A HIGHLY CON TENTIOUS LEGAL ISSUE AND THERE ARE NUMBER OF DECISIONS IN FAVOUR OF THE ASSE SSEE BY SEVERAL COORDINATE BENCHES. THE VERY FACT THAT THIS ISSUE H AS NOW BEEN REFERRED TO A SPECIAL BENCH WOULD SHOW THAT IT IS A HIGHLY DEBA TABLE ISSUE WHICH CAN NOT BE COVERED BY LIMITED SCOPE OF SECTION 254(2) T HAT COVERS TO ONLY SUCH MISTAKES WHICH ARE GLARING MANIFEST AND ON WHI CH NO TWO VIEWS ARE POSSIBLE. FOR THIS SHORT REASON ALONE, GRIEVANCE O F THE ASSESSING OFFICER IS NOT SUSTAINABLE IN LAW. 6. IN VIEW OF THE ABOVE DISCUSSIONS, AND FOR THE RE ASONS SET OUT ABOVE, WE SEE NO MERITS IN THE RECTIFICATION PETITION FILE D BEFORE US. WE REJECT THE M.A.NO.433/MUM/2010 ASHA V MEHTA, 5 SAME AND DECLINE TO INTERFERE. 7. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 4 TH NOVEMBER 2011 SD/- (D.K. AGARWAL) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 4 TH NOVEMBER, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),, MUMBAI 4. COMMISSIONER OF INCOME TAX, , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI