NINCRO INVESTMENT AND FINANCE P. LTD, V. DCIT 9(1),

MA 546/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8824 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 22-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI P.M. JAGTAP, ACCOUNTANT MEMBER MA NO.546/MUM/2011 ARISING OUT OF ITA NO.6644/MUM/2006 FOR A.Y. 2003-0 4 NINCRO INVESTMENTS AND FINANCE PVT. LTD., 49, SAGAR MAHAL, 65, WALKESHWAR ROAD, MUMBAI -400 006 ....... APPLICANT VS INCOME TAX OFFICER, WARD 5(2)(1), MUMBAI ..... RESPONDENT PAN: AABCN 0893 J APPLICANT BY: MR. MITESH MEHTA RESPONDENT BY: MR. A.K. NAYAK DATE OF HEARING: 15.06.2012 DATE OF PRONOUNCEMENT: 22.06.2012 O R D E R PER P.M. JAGTAP, AM BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE IS SEEKING RECTIFICATION OF MISTAKE ALLEGED TO HAVE CREPT IN T HE ORDER OF THE TRIBUNAL DATED 6TH AUGUST, 2009 PASSED IN ITA NO.66 44/MUM/2006 IN NOT ADJUDICATING UPON GROUND NO.B(2). 2. IN THIS CASE, THE LOSS SUFFERED BY THE ASSESSEE AS A RESULT OF NON- RECOVERY OF A SUM OF ` 6,30,000/- ADVANCED TO A SHARE BROKER WAS CLAIMED BY THE ASSESSEE AS A BUSINESS LOSS. THE A.O., HOWEVER, TREATED THE RELEVANT TRANSACTION OF ADVANCE GIVEN B Y THE ASSESSEE AS A SPECULATIVE TRANSACTION AND ACCORDINGLY THE LOSS ARISING FROM NON- RECOVERY OF THE SAID ADVANCE WAS TREATED BY HIM AS A SPECULATIVE LOSS. WHILE DOING SO, THE A.O. DETERMINED THE SPECULATION LOSS BY ADDING PROPORTIONATE EXPENSES WHICH, ACCORDING TO HIM, WER E ATTRIBUTABLE TO MA 546/M/2011 NINCRO INVESTMENTS AND FINANCE PVT. LTD. 2 A SPECULATIVE TRANSACTION. THE LD. CIT (A) UPHELD THE ACTION OF THE A.O. ON THIS ISSUE AND IN THE APPEAL FILED AGAINST THE ORDER OF THE LD. CIT (A), THE ASSESSEE RAISED FOLLOWING GROUNDS PROJ ECTING ITS GRIEVANCE ON THIS ISSUE. B] SPECULATIVE LOSS U/S.73 ` 13,90,714/- 1. THE LEARNED CIT (A) ERRED IN HOLDING THAT MONEY ADVANCED TO BROKER IS FORMING PART OF SPECULATION LOSS U/S.73 AMOUNTING TO ` 6,25,725/-. 2. THE LEARNED CIT (A) ERRED IN CONSIDERING EVEN PROPORTIONATE EXPENSES FOR CALCULATION OF SPECULATI ON LOSS U/S.73 AMOUNTING TO ` 3,35,000/-. 3. WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE V IDE ITS ORDER DATED 6TH AUGUST, 2009, THE TRIBUNAL HAS DECIDED TH E ISSUE RAISED IN GROUND NO.B(1) HOLDING THAT THE RELEVANT TRANSACTIO N NOT BEING IN THE NATURE OF SPECULATIVE TRANSACTION, THE LOSS SUFFERE D BY THE ASSESSEE AS A RESULT OF NON-RECOVERY OF MONEY ADVANCED TO THE B ROKER WAS NOT SPECULATIVE LOSS. THE ISSUE RAISED IN GROUND NO.B( 1) THUS WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BUT NO DE CISION WAS SPECIFICALLY RENDERED ON THE ISSUE RAISED IN GROUND NO.B(2). AS SUBMITTED BY THE ASSESSEE IN THE PRESENT APPLICATIO N, THERE IS THUS A MISTAKE IN THE ORDER OF THE TRIBUNAL IN NOT ADJUDIC ATING UPON GROUND NO.B(2) WHICH IS REQUIRED TO BE RECTIFIED U/S.254(2 ). 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBS ERVED THAT THE ISSUE RAISED IN GROUND NO.B(2) IS CONSEQUENTIAL TO THE MA IN ISSUE INVOLVED IN GROUND NO.B(1) WHICH WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THE ASSESSEE THEREFORE WAS ENTITLED TO R ELIEF ON THE ISSUE INVOLVED IN GROUND NO.B(2) AS A NECESSARY COROLLARY AND THAT IS WHY NO DECISION APPEARED TO HAVE BEEN RENDERED BY THE TRIB UNAL ON THE SAID ISSUE SEPARATELY. THIS POSITION CLEARLY EVIDENT FR OM THE RECORD HAS MA 546/M/2011 NINCRO INVESTMENTS AND FINANCE PVT. LTD. 3 BEEN ACCEPTED BY THE LD. REPRESENTATIVES OF BOTH TH E SIDES. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, HAS SUBMITTED TH AT IN THE ABSENCE OF SEPARATE AND SPECIFIC DECISION RENDERED BY THE T RIBUNAL ON GROUND NO.B(2), THE A.O. HAS NOT GIVEN EFFECT TO THE ORDER OF THE TRIBUNAL TILL DATE. WE, THEREFORE, MODIFY THE ORDER OF THE TRIBU NAL DATED 6TH AUGUST, 2009 (SUPRA) BY DIRECTING THE A.O. TO ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE ON THE ISSUE RAISED IN GROUN D NO.B(2) BY NOT TREATING THE PROPORTIONATE EXPENSES FOR CALCULATION OF SPECULATION LOSS AS THE CONCERNED LOSS ITSELF HAS BEEN HELD TO BE NO T THE SPECULATION LOSS BY THE TRIBUNAL. GROUND NO.B(2) OF THE ASSESS EES APPEAL IS ACCORDINGLY ALLOWED. 5. IN THE RESULT, M.A. OF THE ASSESSEE IS ALLOWED. PRONOUNCED ON 22/06/2012 SD/- ( B.R. MITTAL ) JUDICIAL MEMBER SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER MUMBAI, DATE: 22ND JUNE, 2012 COPY TO:- 1) THE APPLICANT. 2) THE RESPONDENT. 3) THE CIT (A)V, MUMBAI, 4) THE CIT- MC V, MUMBAI. 5) THE D.R. B BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN