DCIT CEN CIR 21, V. SANJAY KOTLY,

MA 544/MUM/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4503 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2001-2002
• Appeal Filed On: 07-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SMT. P.MADHAVI DEVI, JM & SHRI RAJENDRA SINGH, AM M.A.NO. 544/MUM/2009 - ASSESSMENT YEAR 2001-02 [ARISING OUT OF I.T.A.NO.7442/M/2004] ASST. COMMISSIONER OF I.T., CENTRAL CIRCLE 21, MUMBAI. VS. MRS. BINNAIFERR SANJAY KOHLI, B 7, 1 ST FLOOR, SREE SHAKT BLDG., 30 TH ROAD, KHAR [W] MUMBAI 400 052. PAN NO.ABWPN 5434 E (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI MOHD. USMAN. RESPONDENT BY : SHRI SATISH MODI. O R D E R PER P.MADHAVI DEVI, JM: THIS MISCELLANEOUS APPLICATION U/S.254[2] OF THE I .T.ACT IS FILED BY THE REVENUE. THE CONTENTIONS OF THE REVENUE ARE AS UNDER- THIS IS A CASE IN WHICH THE DEPARTMENT AS WELL AS THE ASSESSEE HAVE GONE IN APPEAL FOR A.Y 2001-02 BEFORE THE HONO URABLE ITAT AS DIFFERENT ISSUES DECIDED BY THE CIT(APPEALS). IT IS OBSERVED THAT WHILE DECIDING THE APPEAL, THE ITAT J BENCH MUMBAI HAS SET ASIDE CERTAIN ISSUES AND RESTORED IT BACK TO AO FOR DECIDING FRES H AND RECOMPUTED THE ABOVE INCOME AND IN CASE OF SOME OF THEM HAVE B EEN DECIDED IN FAVOUR OF THE ASSESSEE. AS PER GROUND NO.4 THE DETAILED REPORT RELATING TO LOSS OF RS.48,83,813/- IN SHARE TRADING TREATED AS SPECULAT ION LOSS. APPEAL U/S.260A IS RECOMMENDED ON THIS ISSUE AS THE SHARES WERE BROUGHT AND SOLD ON THE SAME DAY AND SO THE TRADING LOSS OF RS.48,83,813/- WAS TREATED AS SPECULATION LOSS U/S.73 OF THE I.T.A CT , 1961 AND THUS THE SET OFF OF LOSSES AGAINST BUSINESS INCOME WAS N OT ALLOWED. HOWEVER, IT IS NOTICED THAT THE DEPARTMENT HAS RAI SED THE GRIEVANCE BEFORE ITAT IN GROUND NO.4 OF THE APPEAL THAT THE LOSS OF 2 RS.48,82,829/- INCURRED ON SHARE TRANSACTION TO BE SET OFF AGAINST BOGUS INCOME DISALLOWED BY THE AO DECIDED BY THE CI T(A) IN FAVOUR OF THE ASSESSEE, IS NOT JUSTIFIED. THE LEARNED ITAT HAS ALSO GIVEN THE DECISION IN AS SESSEES FAVOUR STATING AS UNDER- WE HAVE VERIFIED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. THE AO HAS CITED FOUR EXPENSES OF TRADING IN SHARES WHICH WERE NOT DELIVERY BASED FOR COMING TO THE CONCLUSIO N THAT THE WHOLE OF THE SHARE TRADING LOSS OF THE ASSESSEE WAS SPECULATIVE IN NATURE. HOWEVER, ASSESSEE POINTED OU T BEFORE LD. CIT(A) THAT THE LOSS ARISING OUT OF THE THREE I NSTANCES OF THE TRANSACTIONS CITED BY THE AO WAS SEPARATELY DEA LT BY IT IN ITS COMPUTATION STATEMENT AND LOSS ARISING THEREFRO M SEPARATELY SHOWN AS SPECULATION LOSS. WE FIND THAT ASSESSEE HAD FILED THE COMPUTATION STATEMENT AS WELL AS THE DETAILS OF SUCH TRADING LOSS BEFORE THE AO AND AO HAD GENERALI ZED WITHOUT PROPERLY APPRECIATING THE BIFURCATION SHOWN BY THE ASSESSEE. 2. ON GOING THROUGH THE SAME, WE FIND THAT THE REVE NUE HAS NOT BEEN ABLE TO POINT OUT AS TO WHAT ITS GRIEVANCE IS. WHEN THIS WAS BROUGHT TO THE NOTICE OF THE LD.DR, HE SOUGHT TIME TO FILE THE MODIFIED MISCELLANEOUS APPLICATION WHICH HAS BEEN SUBSEQUENT LY FILED STATING AS UNDER- IN THE ORDER BEARING NO.7442/MUM/2004/ DATED 23-1- 2009 THE HON'BLE ITAT HELD THE ASSESSEE HAD FILED THE COMPUTATION STATEMENT AS WELL AS THE DETAILS OF TRADING LOSS BEFORE THE A SSESSING OFFICER AND THE AO HAD GENERALIZED WITHOUT PROPERTY APPRECIATIN G THE BIFURCATION SHOWN BY THE ASSESSEE . THE HON'BLE ITAT FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE AND SHOULD HAVE BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO CLARIFY IDENTITY OF THE TRANS ACTION COMING UNDER THE AMBIT OF SPECULATION AND DISALLOW RELATING TO T HE SAME FOR THE ASSESSMENT YEAR 2001-02. 3 FROM THIS MODIFIED MISCELLANEOUS APPLICATION ALSO T HE REVENUE HAS NOT BEEN ABLE TO POINT OUT ANY MISTAKE APPARENT FROM RE CORD WHICH NEEDS RECTIFICATION. WHAT THE REVENUE IS SEEKING THROUGH THE MODIFIED MISCELLANEOUS APPLICATION IS REVIEW OF THE TRIBUNAL S ORDER WHICH IS NOT PERMISSIBLE U/S.254[2] OF THE ACT. IN VIEW OF THE S AME, THE MISCELLANEOUS APPLICATION IS DISMISSED. 3. IN THE RESULT, REVENUES MISCELLANEOUS APPLICAT ION IS DISMISSED. ORDER PRONOUNCED ON THIS 10 TH DAY OF MARCH, 2010. SD/- SD/- (RAJENDRA SINGH) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: MARCH, 2010. P/-*