WALLFORT FINANCIAL SERVICES LTD, V. ADDL CIT RG 4(2),

MA 533/MUM/2011

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1877 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 15-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 14-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SAJJAN KUMAR TULSI YAN A
• Keywords: Business income; Question of law

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, M UMBAI BEFORE S/SHRI D.MANMOHAN,VICE-PRESIDENT AND P.M.JAGTAP , ACCOUNTANT MEMBER . , . . , MA / NO.533/MUM/2011 ARISING OUT OF ./I.T.A.NO.847/MUM/2009 ( 8 / ASSESSMENT YEAR: 2005-06) M/S WALLFORT FINANCIAL SERVICES LTD., 205, GUNDECHA CHAMBERS NAGINDAS MASTER ROAD, FORT, MUMBAI-400001 / VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE 4(2), AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ./ ./PAN/GIR NO. : AAACW0617L ( = / APPELLANT) .. ( >?= / RESPONDENT) = / APPLICANT BY : SHRI SAJJAN KUMAR TULSI YAN >?= A /REVENUE BY : SHRI SANJEEV JAIN A D / DATE OF HEARING : 4.4.2014 A D /DATE OF PRONOUNCEMENT : 28.5.2014 / O R D E R PER P.M.JAGTAP,AM BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE I S SEEKING RECTIFICATION OF THE MISTAKE ALLEGED TO HAVE BEEN CREPT IN THE ORDER OF TRIBUNAL DATED 30.6.2010 PASSED IN ITA NO.847/MUM/2009 (AY-2005-06). 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE SOLITA RY ISSUE INVOLVED IN THE APPEAL OF THE ASSESSEE BEING ITA NO.847/MUM/2009 WAS WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE INCOME FROM DELIVERY BASED SALES AN D PURCHASES OF SHARES SHOULD BE ASSESSED AS BUSINESS INCOME AS CLAIMED BY THE AO OR IT SHOULD BE ASSESSED AS SHORT MA / NO.533/MUM/2011 2 TERM CAPITAL GAIN (STCG) AS DECLARED BY THE ASSES SEE. AFTER CONSIDERING THE RELEVANT FACTS AND FIGURES IN DETAIL IN ITS ORDER DATED 30.6 .2010 (SUPRA), THE TRIBUNAL HELD THAT THE TRANSACTIONS OF PURCHASES AND SALE OF DELIVERY BASED SHARES WERE EFFECTED BY THE ASSESSEE AS TRADER AND THE PROFIT FROM THE SAID TR ANSACTIONS THUS, WAS CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE AS BUSINESS INCOME AS RIGHTLY HELD BY THE AO. AS SUBMITTED BY THE ASSESSEE IN THE PRESENT MISCELLA NEOUS APPLICATION AND FURTHER REITERATED BY THE LD.COUNSEL FOR THE ASSESSEE AT T HE TIME OF HEARING BEFORE US, THE FIGURES PERTAINING TO THE TURNOVER OF THE ASSESSEE COMPANY OF DELIVERY BASED SHARES TAKEN BY THE TRIBUNAL TO WORK OUT THE RELEVANT R ATIOS ARE FACTUALLY INCORRECT AND THE DECISION RENDERED BY THE TRIBUNAL TREATING THE ASS ESSEE AS TRADER IN DELIVERY BASED SHARES ON SUCH INCORRECTLY COMPUTED RATIOS ARE L IABLE TO BE SET ASIDE. HE CONTENDED THAT THE ASSUMPTION OF WRONG FACTS BY THE TRIBUNAL PERTAINING TO THE TURNOVER OF THE ASSESSEE-COMPANY OF THE DELIVERY BASED SHARES THUS HAS GIVEN RISE TO A MISTAKE APPARENT FROM THE RECORD AND THE ORDER OF THE TRIB UNAL TREATING THE ASSESSEE AS TRADER IN SHARES ON THE ASSUMPTION OF SUCH WRONG FACTS IS REQUIRED TO BE RECALLED. 3. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED TH AT THERE IS NO MISTAKE APPARENT FROM THE RECORD IN THE ORDER OF THE TRIBUNAL IN ASS UMING WRONG FACTS AS ALLEGED BY THE ASSESSEE. HE HAS CONTENDED THAT THE DECISION OF TH E TRIBUNAL TREATING THE ASSESSEE AS TRADER IN DELIVERY BASED SHARES HAS BEEN RENDERED A FTER TAKING INTO CONSIDERATION ALL THE RELEVANT FACTS AND FIGURES OF THE ASSESSEES CASE A ND IT CANNOT BE SAID THAT THERE IS ANY MISTAKE APPARENT FROM THE RECORD IN THE WELL DISCUS SED AND WELL REASONED ORDER OF THE TRIBUNAL CALLING FOR ANY RECTIFICATION U/S 254(2) OF THE ACT. 4. AFTER HEARING THE ARGUMENTS OF BOTH THE SIDES ON THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE, THE LD. REPRESENTATIVES OF BOTH THE SIDES WERE REQUIRED TO CLARIFY AS TO WHETHER AN APPEAL HAS BEEN FILED BY THE ASSES SEE AGAINST THE ORDER OF TRIBUNAL DATED 30.6.2010 PASSED IN ITA NO.847/MUM/2009. I N THE REPLY FILED IN WRITING, BOTH MA / NO.533/MUM/2011 3 THE SIDES HAVE CLARIFIED THAT THE APPEAL FILED BY T HE ASSESSEE AGAINST THE SAID ORDER OF THE TRIBUNAL HAS ALREADY BEEN ADMITTED BY THE HONB LE BOMBAY HIGH COURT VIDE ITS ORDER DATED 26.2.2013 PASSED IN INCOME TAX APPEAL NO. 67 71 OF 2010. A COPY OF THE SAID ORDER IS PLACED ON RECORD BEFORE US WHICH CLEARLY SHOWS THAT THE APPEAL OF THE ASSESSEE HAS ALREADY BEEN ADMITTED BY THE HONBLE B OMBAY HIGH COURT ON THE TWO SUBSTANTIAL QUESTION OF LAW, ONE OF WHICH IS AS UN DER : WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE APPELLANT IS A TRADER AND NOT AN INVESTOR IN SHARES? 5. AS ALREADY NOTED ABOVE, THE ASSESSEE IN THE PRE SENT MA IS SEEKING RECTIFICATION OF THE ORDER OF TRIBUNAL TREATING IT AS TRADER IN SHARES AND THE APPEAL OF THE ASSESSEE FILED AGAINST THE SAID ORDER ON THE SAME ISSUE HAS ALREADY BEEN ADMITTED BY THE HONBLE BOMBAY HIGH COURT. IN THE CASE OF TATA COMMUNICA TION LTD V/S JCIT 121 ITD 384(SB) CITED BY THE LD. COUNSEL FOR THE ASSESSEE, IT WAS HELD BY THE TRIBUNAL THAT WHEN THE QUESTION WAS PENDING BEFORE THE HIGH COURT, IT WAS NOT RIGHT FOR THE ASSESSEE TO AGITATE THE SAME OR PART THEREOF BEFORE THE TRIBU NAL BY WAY OF MISC. APPLICATION. IN THE CASE OF CIT V/S MUNI SEVA ASHRAM (INCOME TAX APPEAL NO.661 OF 2013 DATED 24.7.2013) THE APPEAL FILED BY THE ASSESSEE AGAINST THE TRIBUNALS ORDER DATED 11.7.2008 PASSED IN ITA NO.633/AHD/ 2008, WHICH WA S ADMITTED BY THE HONBLE HIGH COURT OF GUJARAT ON THE SUBSTANTIAL QUESTION OF LAW ARISEN FROM THE SAID APPEAL AND KEEPING IN VIEW THE SAME, IT WAS HELD BY THE HONB LE GUJARAT HIGH COURT THAT THE ORDER OF THE TRIBUNAL RECALLING THE ORDER DATED 11. 7.2008 PASSED IN INCOME TAX APPEAL NO.633/AHD/2008 COULD NOT BE SUSTAINED. TAKING INT O CONSIDERATION THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TATA COMMUNICATION (SUPRA) AND THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF MUNI SEVA ASHRAM (SUPRA), WE HOLD THAT THE PRESENT MISC. APPLICATION FILED BY TH E ASSESSEE IS LIABLE TO BE REJECTED. WE ORDER ACCORDINGLY. MA / NO.533/MUM/2011 4 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH DAY OF MAY, 2014 A G H I 28TH DAY OF MAY, 2014 A SD SD ( . / D.MANMOHAN) ( . . /P.M.JAGTAP ) / VICE-PRESIDENT / ACCOUNTANT MEMBER MUMBAI : 28.5.2014 . 8 . ./ SRL , SR. PS ! / COPY OF THE ORDER FORWARDED TO : 1. = / THE APPLICANT 2. >?= / THE RESPONDENT. 3. R ( ) / THE CIT(A)- 4. R / CIT 5. >88T , D T , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) D T , /ITAT, MUMBAI