ACCRA INVESTMENTS P.LTD, V. ITO RG 3(1)(1),

MA 526/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0365 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 13-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: J D MISTRI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH, D MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNT ANT MEMBER MA NO: 526/MUM/2012 ARISING OUT OF : 5457/MUM/2009 ASSESSMENT YEAR : 2006-07 M/S. ACCRA INVESTMENTS PVT. LTD. 402-A, BAKHTAWAR, SAHID BHAGAT SINGH ROAD OPP. COLABA POST OFFICE MUMBAI-400 005. PAN NO: AADCA 8373 N INCOME TAX OFFICER RANGE 3(1)(1) ROOM NO.666, M.K. ROAD AAYAKAR BHAVAN MUMBAI-400 020. (APPLICANT) VS. (RESPONDENT) APPLICANT BY : SHRI J.D. MISTRI RESPONDENT BY : SHRI MOHIT JAIN DATE OF HEARING : 26.04.2013 DATE OF PRONOUNCEMENT : 10.04.2013 ORDER PER RAJENDRA SINGH (AM). THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE REQUESTING FOR AMENDMENT/RECALL OF THE ORDER DATED 25.4.2012 OF THE TRIBUNAL IN ITA NO.5457/M/2009 ON THE GROUND OF SOME APPAREN T MISTAKES IN THE ORDER. 2. BEFORE WE PROCEED TO DEAL WITH THE MISTAKES POIN TED OUT BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION, IT WOULD BE APPROPRIATE TO GIVE A BRIEF BACKGROUND OF THE CASE. THE ASSESSEE HAD PUR CHASED 30700 SHARES OF M/S. MILLENIUM ALCOBEV P. LTD. (MABL), AN UNLISTED COMPANY FOR A SUM OF RS.6,54,28,660/- ON 7.5.2003 IN ASSESSMENT YEAR 200 4-05 WHICH WAS SOLD IN ASSESSMENT YEAR 2006-07 FOR A SUM OF RS.16,66,60,00 0/-. THE SHARES HAD MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 2 BEEN ACQUIRED @ OF RS.21.30 PER SHARE AGAINST FACE VALUE OF RS.10.00. THE ISSUE WAS WHETHER THE INCOME FROM SALE OF SHARES HA S TO BE ASSESSED AS INCOME FROM CAPITAL GAIN OR BUSINESS INCOME. THE AO AFTER CONSIDERING THE VARIOUS FACTS SUCH AS LOSSES INCURRED BY THE COMPAN Y FROM THE VERY BEGINNING, WHICH WENT ON INCREASING AND THERE BEING NO CHANCE OF DECLARING ANY DIVIDEND FOR MANY YEARS AND PURCHASES BEING NOT MADE FROM OWN FUNDS, HELD THAT TRANSACTION WAS ADVENTURE IN THE NATURE O F TRADE, AND NOT INVESTMENT. HE, THEREFORE, ASSESSED INCOME AS INCOM E FROM BUSINESS. CIT(A) DID NOT AGREE WITH THE FINDING OF THE AO AND HELD T HAT THE SHARE HAD BEEN PURCHASED AS A STRATEGIC INVESTOR FOR RUNNING THE C OMPANY AND THE INTENTION WAS THUS TO ACQUIRE CONTROLLING POWER AND NOT TO TR ADE IN SHARES. HE, THEREFORE HELD THAT INCOME HAD TO BE ASSESSED AS CA PITAL GAIN. 2.1 IN FURTHER APPEAL BY THE REVENUE, THE TRIBUNAL NOTED THAT MABL HAD LOSSES OF RS.40.46 LACS IN ASSESSMENT YEAR 2002-03 WHICH INCREASED TO RS.18.64 CRORES IN ASSESSMENT YEAR 2003-04 AND LOSS WENT ON INCREASING AND THE COMPANY INCURRED LOSS OF RS.60.35 CRORES IN ASS ESSMENT YEAR 2006-07. THE SHARE CAPITAL OF THE COMPANY WAS ONLY RS.800/- WHICH HAD BEEN COMPLETELY WIPED OUT AND BOOK VALUE OF SHARE WAS, T HEREFORE, NIL OR NEGATIVE. THE SHARES HAD BEEN PURCHASED FROM BORROWED FUNDS. THOUGH THE ASSESSEE EXPLAINED THAT WITHIN TWO WEEKS, THE BORROWED FUNDS WERE REPLACED BY SHARE APPLICATION MONEY RECEIVED FROM M/S. FEEDBACK COMPU TERS PVT. LTD. BUT SHARES WERE NEVER ALLOTTED. THEREFORE, THE SOURCE O F INVESTMENT REMAINED BORROWING. THE TRIBUNAL ALSO OBSERVED THAT SHRI R.K . JAIN, THE MAIN DIRECTOR OF THE ASSESSEE COMPANY, WHO HAD VAST EXPERIENCE IN BR EWERIES BUSINESS WAS MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 3 ALSO DIRECTOR OF MABL AND WAS FULLY AWARE THAT MABL WAS NOT GOING TO DECLARE ANY DIVIDEND FOR MANY YEARS IN FUTURE. NO INVESTOR WILL PURCHASE SHARES OF LOSS MAKING COMPANY AT SUCH HIGH PRICE WITH BORROWED FUN DS WHEN IT WAS NOT GOING TO DECLARE ANY DIVIDEND. THE EXPLANATION OF T HE ASSESSEE THAT IT HAD TO SELL SHARES AS IT WAS A MINORITY SHARE HOLDER AND W AS NOT ABLE TO INFUSE FURTHER CAPITAL, WAS NOT ACCEPTED ON THE GROUND THA T AT THE TIME OF INVESTMENT, THE ASSESSEE WAS AWARE THAT IT WAS A MI NORITY SHARE HOLDER AND IT WAS ALSO KNOWN THAT THE COMPANY WOULD REQUIRE INFUS ION OF HUGE CAPITAL BECAUSE THE COMPANY WAS INCURRING LOSSES. DESPITE T HIS THE ASSESSEE HAD PURCHASED SHARES WHICH OBVIOUSLY WAS WITH A VIEW TO MAKE PROFIT ON RESALE OF SHARES DUE TO EXPECTED HIGH VALUATION OF SHARES IN FUTURE BECAUSE OF STRONG REPUTATION OF PROMOTERS I.E. S & N WHICH WAS A BRIT ISH COMPANY AND UNITED BREWERIES LTD. (UBL) BOTH OF WHOM WERE HOLDING 40% SHARE HOLDING EACH IN THE COMPANY. 2.2 THE TRIBUNAL DID NOT AGREE WITH THE FINDING OF CIT(A) THAT THE PURCHASE AND SALE OF SHARE WAS TO ACQUIRE CONTROLLING POWER AND NOT FOR TRADING IN SHARES OF MABL BECAUSE THE ASSESSEE, WHO WAS HAVING ONLY 20% SHARE HOLDING, COULD NOT HAVE CONTROLLING STAKE IN THE CO MPANY. THE ASSESSEE HAD ALSO BEEN DESCRIBED AS MANAGER IN SHAREHOLDERS AGR EEMENT BECAUSE DAY TO DAY MANAGEMENT OF THE COMPANY HAD BEEN ENTRUSTED TO ITS MD SHRI R.K. JAIN. THE TRIBUNAL OBSERVED THAT SHRI R.K. JAIN HAD BEEN APPOINTED MD OF MABL BECAUSE OF VAST EXPERIENCE IN THE BREWERIES BUSINES S AND NOT BECAUSE OF SHARE HOLDING OF THE ASSESSEE COMPANY IN MABL. HE W AS ALSO DIRECTOR OF MABL EARLIER. THE TRIBUNAL FURTHER OBSERVED THAT TH ERE WAS NOTHING IN THE MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 4 SHAREHOLDERS AGREEMENT TO INDICATE THAT ACQUISITION OF 20% SHARE HOLDING WAS A CONDITION FOR GIVING MANAGEMENT RIGHTS TO THE ASSESSEE COMPANY. IN FACT, THE ASSESSEE, IT WAS OBSERVED BY THE TRIBUNAL , HAD NO MANAGEMENT RIGHTS. IT WAS ONLY A MANAGER FOR LOOKING AFTER DAY TO DAY MANAGEMENT WORK. THE CLAUSE (4.1) OF, SHAREHOLDERS AGREEMENT CLEARLY PROVIDED THAT SUPERVISION OF BUSINESS OPERATIONS, AFFAIRS AND ACTIVITIES OF T HE COMPANY INCLUDING ACTIVITIES OF MD SHRI R.K. JAIN OR EXECUTIVE COMMIT TEE WAS RESPONSIBILITY OF THE BOARD IN WHICH FOUR OUT OF FIVE DIRECTORS WERE FROM THE PROMOTERS SIDE. CLAUSE 4.4.2 OF THE SHAREHOLDERS AGREEMENT ALSO PRO VIDED THAT SHRI R.K. JAIN WILL EXERCISE HIS AUTHORITY IN CONSULTATION WITH TH E EXECUTIVE COMMITTEE. 2.3 THE TRIBUNAL THEREFORE CONCLUDED THAT THE ASSE SSEE DID NOT HAVE ANY MANAGEMENT RIGHTS BUT HAD ONLY BEEN APPOINTED AS MA NAGER FOR LOOKING AFTER DAY TO DAY WORK BECAUSE OF VAST EXPERIENCE OF ITS M D, SHRI R.K. JAIN IN THE FIELD. THE TRIBUNAL DISTINGUISHED THE JUDGMENT OF T HE HON'BLE SUPREME COURT IN THE CASE OF RAMNARAIN SONS (PR.) LTD. (41 ITR 534) ON THE GROUND THAT IN THAT CASE THE ASSESSEE HAD PURCHASED SHARES AT HIGH PREMIUM TO ACQUIRE CONTROLLING RIGHTS OVER THE COMPANY TO GET THE MANA GING AGENCY RIGHTS, WHICH WAS NOT SO IN THE PRESENT CASE. THE ASSESSEE HAD AL SO PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF RENATO FINANCE AND INVESTMENT LTD. (ITA NO.115/M/09 FOR ASSESSMENT YEAR 2005-06) . IT WAS DISTINGUISHED BY THE TRIBUNAL ON THE GROUND THAT IN THAT CASE THE SHARES HAD BEEN SOLD AFTER HOLDING FOR ABOUT FOUR YEARS TO THE HOLDING COMPAN Y OF THE ASSESSEE AND WAS THEREFORE OF THE NATURE OF THE CAPITAL. THE CASE OF THE ASSESSEE IS DIFFERENT. THE TRIBUNAL THEREFORE FINALLY HELD THAT THE INTENT ION OF THE ASSESSEE IN MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 5 PURCHASING SHARES WAS TO MAKE PROFIT ON RESALE OF S HARES AS SHARE PRICES MAY RISE BECAUSE OF STRONG MARKET REPUTATION AND GOODWI LL OF THE PROMOTERS. THE SAID FINDING WAS SUPPORTED BY THE FACT THAT THE ASS ESSEE WITHIN THE LOCK-IN PERIOD SOLD THE SHARES TO THE PROMOTERS AT HIGH PRI CE. THE TRIBUNAL ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) AND UPHEL D THE ORDER OF AO TREATING THE TRANSACTION AS ADVENTURE IN THE NATURE OF TRADE AND INCOME ARISING THERE FROM AS BUSINESS INCOME. THE ASSESSEE THEREAFTER HA S FILED THE PRESENT MISCELLANEOUS APPLICATION REQUESTING FOR AMENDMENT /RECALL OF THE ORDER ON THE GROUND OF SOME APPARENT MISTAKES. 3. THE ASSESSEE IN THE MISCELLANEOUS APPLICATION HA S REFERRED TO THE OBSERVATION OF THE TRIBUNAL IN PARA 5.5 TO THE EFFE CT THAT NO INVESTOR WILL PURCHASE SHARES AT SUCH HIGH PRICE WHEN THERE WAS N OT GOING TO BE ANY RETURN IN THE YEARS TO COME. IT HAS BEEN POINTED OU T THAT THE TRIBUNAL IN MAKING THE ABOVE OBSERVATION LOST SIGHT OF THE FACT THAT ONE OF THE OTHER INVESTORS I.E. S&N HAD ACQUIRED SHARE AT STILL HIGH ER PREMIUM AT RS.87.95 PER SHARE WHICH WAS CLEAR FROM PARA 3.1 OF THE SUBSCRIP TION AGREEMENT . THE LD. AR SUBMITTED THAT IN CASE THE ABOVE FACT WAS CONSID ERED THE FINDING OF THE TRIBUNAL WOULD UNDERGO A CHANGE. THE ASSESSEE IN TH E MISCELLANEOUS APPLICATION HAS ALSO REFERRED TO THE OBSERVATIONS O F THE TRIBUNAL IN PARA 5.5 IN WHICH IT HAS BEEN MENTIONED THAT THOUGH BORROWED FU NDS WERE REPLACED BY SHARE APPLICATION MONEY RECEIVED FROM M/S. FEEDBACK COMPUTERS LTD., SHARES WERE NEVER ALLOTTED AND, THEREFORE NATURE OF MONEY RECEIVED REMAINED AS BORROWINGS. THE LD. AR POINTED OUT THAT THE STATEME NT THAT SHARES WERE NEVER ALLOTTED WAS NOT CORRECT AS SHARES WERE ALLOTTED ON 5.12.2010. IT HAD MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 6 THEREFORE BEEN REQUESTED THAT THE ORDER MAY BE AMEN DED. THE ASSESSEE HAS ALSO REFERRED TO THE OBSERVATION OF THE TRIBUNAL IN PARA 5.6 IN WHICH THE TRIBUNAL NOTED THAT THERE WAS NOTHING IN THE SHAREH OLDERS AGREEMENT OR IN SHARE SUBSCRIPTION AGREEMENT TO INDICATE THAT 20% O F SHARE HOLDING WAS A CONDITION FOR GIVING MANAGEMENT RIGHTS TO THE ASSES SEE COMPANY AND THAT APPOINTMENT OF SHRI R.K. JAIN WAS NOT BECAUSE OF SH AREHOLDING OF THE ASSESSEE COMPANY. THE LD. AR POINTED OUT THAT SHAR EHOLDERS AGREEMENT CLEARLY PROVIDED THAT POSITION OF BOARD OF DIRECTOR S WOULD BE IN THE RATIO OF SHARE HOLDING AND THEREFORE THE ASSESSEE HAVING 20% SHARE HOLDING WAS ALLOWED TO NOMINATE ONE DIRECTOR WHILE TWO DIRECTOR S EACH WERE TO BE NOMINATED BY THE OTHER PROMOTERS. IT WAS, THEREFORE , NOT CORRECT TO STATE THAT APPOINTMENT OF SHRI R.K. JAIN WAS NOT BECAUSE OF SH ARE HOLDING OF THE ASSESSEE COMPANY. THE ASSESSEE IN THE MISCELLANEOUS APPLICATION HAS ALSO SUBMITTED THAT MABL WAS NOT A PUBLIC LISTED ENTITY WHOSE SHARES COULD RISE AND FALL ON ACCOUNT OF MARKET REPUTATION AND GOOD W ILL OF PROMOTERS AND, THEREFORE, THE OBSERVATION OF THE TRIBUNAL IN PARA 5.8 THAT THE SHARE PRICE CAN RISE BECAUSE OF STRONG MARKET REPUTATION AND GOODWI LL OF OTHER PROMOTERS WAS NOT CORRECT. THE LD. AR FOR THE ASSESSEE ALSO ARGUE D THAT THE TRIBUNAL HAD WRONGLY DISTINGUISHED THE JUDGMENT OF HON'BLE SUPRE ME COURT IN THE CASE OF RAMNARAIN SONS (PR.) LTD. (SUPRA), AND THE DECISION OF THE TRIBUNAL IN THE CASE OF RENATO FINANCE AND INVESTMENT LTD. (SUPRA), THOUGH NO SUCH ISSUE HAS BEEN MENTIONED BY THE ASSESSEE IN THE MISCELLAN EOUS APPLICATION. 3.1 THE LD. DR APPEARING FOR THE REVENUE ON THE OTH ER HAND ARGUED THAT THE TRIBUNAL HAD PASSED A REASONED AND SPEAKING ORD ER COVERING ALL ASPECTS MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 7 AND THE MISTAKES POINTED OUT DO NOT AFFECT THE DECI SION OF THE TRIBUNAL. THEREFORE, THERE WAS NO APPARENT MISTAKE IN THE ORD ER OF THE TRIBUNAL. IT WAS ALSO SUBMITTED THAT THE TRIBUNAL HAD NO POWER TO R EVIEW ITS OWN DECISIONS. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. WE FIND NO ERROR IN THE OBSERVATION OF THE TRIBUNAL TH AT NO INVESTOR WOULD PURCHASE SHARES AT SUCH HIGH PRICE OF RS.21.30 PER SHARE WHEN THERE WAS GOING TO BE NO RETURN IN THE YEARS TO COME. THE FIN DING WAS BASED ON RELEVANT FACTS SUCH AS HIGH LOSSES ETC. ABOUT WHICH THERE IS NO DISPUTE. THE SHARE PRICE CHARGED IN CASE OF THE ASSESSEE WHICH W AS ONLY AN INVESTOR COULD NOT BE COMPARED TO THE PRICE PAID BY OTHER TWO PART IES I.E. S&N AND UBL WHO HAD ACQUIRED CONTROLLING/STRATEGIC STAKE OF 40% EAC H AND WERE THE REAL PROMOTERS. THE STATUS OF THE ASSESSEE WAS ONLY THAT OF A MANAGER WHICH IS CLEARLY MENTIONED IN CLAUSE 2.2 OF THE SUBSCRIPTION AGREEMENT. IT IS A COMMON KNOWLEDGE THAT IT IS THE REAL PROMOTERS WHO BRING IN CAPITAL FOR THE FORMATION OF THE COMPANY AT A HIGH PREMIUM PARTICUL ARLY IN LOSS MAKING COMPANIES SO AS TO INFUSE SUFFICIENT CAPITAL, KEEPI NG THE EQUITY CAPITAL LOW WHICH IS GOOD FROM THE POINT OF VIEW OF SERVICEABIL ITY. OTHER SHARE HOLDERS WHO DO NOT HAVE ANY STRATEGIC/CONTROLLING STAKE CAN NOT BE EXPECTED TO PAY SUCH HIGH PREMIUM. THEREFORE, MERELY BECAUSE THE PR OMOTERS HAD PAID HIGH PREMIUM, IT CAN NOT BE SAID THAT THE PREMIUM PAID B Y THE ASSESSEE WAS NOT HIGH. THE CASE OF THE ASSESSEE HAS TO BE VIEWED FRO M THE POINT OF VIEW OF AN INVESTOR WHO EXPECTS RETURN ON THE INVESTMENT AND N O INVESTOR SHALL ACQUIRE SHARE @ RS.21.30 PER SHARE WHEN THE BOOK VALUE IS A LMOST NIL AND LOSSES WERE MOUNTING WITH NO POSSIBILITY OF RETURN FOR MAN Y YEARS TO COME. PAYING MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 8 HIGH PREMIUM BY A PERSON IN SUCH A CASE CAN ONLY BE CONSIDERED AS AN ADVENTUROUS STEP IN THE HOPE THAT SHARE PRICE ON CO MPLETION OF THE PROJECT COULD RISE DUE TO STRONG REPUTATION AND GOODWILL OF THE PROMOTERS. THEREFORE, WE DO NOT FIND ANY ERROR IN THE OBSERVATIONS OF THE TRIBUNAL. 4.1 AS REGARDS OBSERVATION OF THE TRIBUNAL THAT BO RROWED FUNDS WERE REPLACED BY SHARE APPLICATION MONEY AND THE SHARES WERE NEVER ALLOTTED, WE FIND THAT THE APPLICATION MONEY WAS RECEIVED DURING ASSESSMENT YEAR 2003-04 AND NO SHARES WERE ALLOTTED EVEN TILL DATE OF PASSI NG OF ORDER BY CIT(A) I.E. TILL 29.7.2009. THE SHARES, IT WAS SUBMITTED AT THIS STA GE, WERE ALLOTTED ON 5.12.2010 WHICH OBVIOUSLY IS AN AFTERTHOUGHT AS THE ASSESSEE CAME TO KNOW THAT NON-ALLOTMENT OF SHARES WAS GOING AGAINST THE ASSESSEE. MOREOVER, TILL SHARES ARE ALLOTTED, MONEY RECEIVED FROM APPLICANTS REMAINS A LIABILITY WITH THE ASSESSEE AND, THEREFORE, IT HAS TO BE TREATED A S ADVANCE/LOAN. NO GENUINE INVESTOR WILL BUY SHARES OF A LOSS MAKING COMPANY A T PREMIUM FROM SUCH FUNDS WHICH CAN NOT BE TREATED AS OWN FUND OF THE A SSESSEE AS SHARES HAD NOT BEEN ALLOTTED. THEREFORE, EVEN IF THE SHARES W ERE ALLOTTED SEVERAL YEARS LATER, THE CONCLUSION DRAWN BY THE TRIBUNAL WILL NO T BE IMPACTED. 4.2 IT HAS ALSO BEEN ARGUED THAT SHARES ACQUIRED BY THE ASSESSEE WERE IN A PRIVATE LIMITED COMPANY WHICH WAS UNLISTED, WHICH C OULD NOT BE BOUGHT AND SOLD FREQUENTLY. THEREFORE THE SHARES OF SUCH COMPA NY COULD NOT RISE OR FALL ON ACCOUNT OF MARKET REPUTATION AND GOODWILL OF PRO MOTERS AS HAS BEEN OBSERVED BY THE TRIBUNAL. EVEN IF THE SHARES ARE NO T LISTED, THE VALUE OF SHARES OF UNLISTED COMPANIES ALSO APPRECIATE WITH T HE PASSAGE OF TIME WHEN THE COMPANY IS ESTABLISHED AND BECOMES OPERATIONAL. IN SUCH APPRECIATION IN MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 9 VALUE, THE MARKET REPUTATION AND GOODWILL OF PROMOT ERS ALSO PLAYS A ROLE. THIS IS FULLY DEMONSTRATED IN THIS CASE BY THE FACT THAT THE ASSESSEE SOLD SHARES THREE YEARS LATER TO THE PROMOTERS AT A HIGH PRICE. THE RISE AND FALL DOES NOT MEAN FLUCTUATION ON DAILY BASIS. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT IN CASE OF RENATO FINANCE AND INVESTMENT LTD. (SUPRA), THE TRIBUNAL HELD THAT PROFIT FROM SALE OF SHARES OF UNLISTED COMPANY COUL D NOT BE CONSIDERED AS STOCK-IN-TRADE OR BUSINESS PROFIT. THE SAID DECISIO N OF THE TRIBUNAL HAD BEEN DULY CONSIDERED BY THE TRIBUNAL IN THIS CASE AND DI STINGUISHED ON FACTS. THE TRIBUNAL, IN THAT CASE, CONSIDERING THE FACT THAT S HARES WERE OF A PRIVATE COMPANY AND THE SAME WERE SOLD TO THE HOLDING COMPA NY AFTER FOUR YEARS, HELD THAT IT COULD NOT BE SAID THAT THE ASSESSEE WA S ENGAGED IN TRADING OF SHARES. IN THE PRESENT CASE THE TRIBUNAL HAS NOT HE LD THAT THE ASSESSEE WAS TRADING IN SHARES. IT HAS BEEN HELD BY THE TRIBUNAL THAT THE TRANSACTION WAS ADVENTURE IN THE NATURE OF TRADE. EVEN A SINGLE TRA NSACTION CAN BE CONSIDERED AS ADVENTURE IN THE NATURE OF TRADE. IN CASE OF RENATO FINANCE AND INVESTMENT LTD. (SUPRA), THE TRIBUNAL HAD NOT CONSIDERED TRANSACTI ON AS ADVENTURE IN THE NATURE OF TRADE BECAUSE IT WAS A S OLITARY TRANSACTION IN WHICH SHARES HAD BEEN SOLD TO THE HOLDING COMPANY WHICH F ULLY OWNED THE ASSESSEE COMPANY WHICH IS NOT SO IN THE PRESENT CASE IN WHIC H SHARES HAVE BEEN SOLD TO OUTSIDERS. WE, THEREFORE DO NOT SEE ANY APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL ON THIS ACCOUNT. 4.3 THE ASSESSEE HAS ALSO POINTED OUT MISTAKE IN TH E OBSERVATION OF THE TRIBUNAL THAT THE APPOINTMENT OF SHRI R.K. JAIN AS DIRECTOR WAS NOT BECAUSE OF SHAREHOLDING OF THE ASSESSEE COMPANY AND ALSO IN TH E OBSERVATION THAT THERE MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 10 WAS NOTHING IN THE SHAREHOLDERS AGREEMENT TO INDICA TE THAT ACQUISITION OF 20% OF SHARE HOLDING BY THE COMPANY WAS A CONDITION FOR GIVING MANAGEMENT RIGHTS TO THE ASSESSEE . THE ASSESSEE DU RING THE PRESENT PROCEEDINGS ALSO COULD NOT POINT OUT ANY SPECIFIC P ROVISION IN THE SHAREHOLDERS AGREEMENT AS PER WHICH 20% SHAREHOLDIN G OF THE ASSESSEE WAS A CONDITION FOR GIVING MANAGEMENT RIGHTS TO THE ASS ESSEE COMPANY. IN FACT THE ASSESSEE COMPANY DID NOT HAVE ANY MANAGEMENT RI GHTS WHICH MEANS THE RIGHT TO MANAGE THE COMPANY IN THE MANNER IT LIKES. THE ASSESSEE HAD ONLY RIGHT TO NOMINATE A DIRECTOR AND THE ASSESSEE HAD N OMINATED SHRI R.K. JAIN WHO HAD BEEN GIVEN THE JOB OF LOOKING AFTER DAY TO DAY MANAGEMENT. HE HAD NO INDEPENDENT POWERS TO MANAGE THE COMPANY. UNDER THE PROVISIONS OF CLAUSE 4.1 OF THE SHAREHOLDERS AGREEMENT SHRI R.K. JAIN HAD TO WORK UNDER THE OVERALL SUPERVISION OF THE BOARD ON WHICH FOUR DIRECTORS WERE FROM THE SIDE OF THE TWO MAIN PROMOTERS. IT WAS ARGUED THAT SHRI R.K. JAIN HAD BEEN APPOINTED BECAUSE OF SHARE HOLDING OF THE ASSESSEE IN MABL AS PER WHICH THE ASSESSEE COULD NOMINATE ONE DIRECTOR. IT IS TRUE TH AT THE ASSESSEE COMPANY HAD RIGHT TO NOMINATE A DIRECTOR, NOT NECESSARILY, SHRI R.K. JAIN WHO HAD BEEN APPOINTED DIRECTOR BECAUSE OF HIS VAST EXPERIENCE I N THE BREWERIES BUSINESS. THIS FACT HAS ALSO BEEN MADE CLEAR IN THE SHARE SUB SCRIPTION AGREEMENT IN WHICH SHRI R.K. JAIN HAS BEEN REFERRED TO AS HAVING SUBSTANTIAL EXPERIENCE IN THE BREWERIES INDUSTRY. THEREFORE, WE DO NOT SEE AN Y ERROR IN THE OBSERVATION OF THE TRIBUNAL THAT APPOINTMENT OF SHRI R.K. JAIN WAS NOT BECAUSE OF SHARE HOLDING OF THE ASSESSEE COMPANY BUT BECAUSE OF HIS VAST EXPERIENCE IN THE BREWERIES BUSINESS. MA NO. 526/MUM/2012 ARISING OU T OF ITA NO. 5457/M/09 A.Y: 06-07 11 5. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE C ASE AS DISCUSSED ABOVE, WE DO NOT SEE ANY APPARENT MISTAKE IN THE OR DER OF THE TRIBUNAL IN HOLDING THAT TRANSACTION WAS ADVENTURE IN THE NATUR E OF TRADE, AND HAS TO BE ASSESSED AS BUSINESS INCOME. THE TRIBUNAL HAS NO PO WER TO REVIEW ITS OWN DECISION. THE MISCELLANEOUS APPLICATION IS, THEREFO RE REJECTED. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE STANDS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.5.2013. SD/- SD/- ( B.R. MITTAL) ( RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 10.5.2013. JV. COPY TO: THE APPLICANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.