ITO (1)(4), V. GINNERS AND PRESSERS LTD,

MA 597/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9070 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2003-2004
• Appeal Filed On: 21-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V KRISHNA MURTHY
• Keywords: Cost of acquisition
• Section: 2

Judgement Text

1 M.A.NO.597/MUM/2011 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE D.K. AGARWAL, JUDICIAL MEMBER AND SHRI P.M.JAGTAP, ACCOUNTANT MEMBER M.A. NO.597/MUM/2011. (ARISING OUT OF ITA NO.3981/MUM/2007) ASSESSME NT YEAR : 2003-04. THE INCOME-TAX OFFICER, M/S GINNERS AND PRESSERS LTD. 1(1)(4), MUMBAI. VS. ORIENTAL HOUSE, 5 TH FLOOR, 7, J. TATA ROAD, CHURCHG ATE, MUMBAI 400 020. PAN : AAACG1415C APPLICANT. RESPONDENT. APPLICANT BY : SHRI V. KRISHNAMURTHY. . RESPONDENT BY : SHRI HARESH SHAH. DATE OF HEA RING : 07-09-2012. DATE OF PRONOUNCEM ENT : 07-09-2012. O R D E R PER P.M. JAGTAP, A.M. : BY THIS MISCELLANEOUS APPLICATION, THE REVENUE IS SEEKING RECTIFICATION OF THE MISTAKES ALLEGED TO HAVE CREPT IN THE ORDER OF THE TRIBUNAL DATED 20 TH JANUARY, 2010 PASSED IN ITA NO. 3981/MUM/2007 ON THE FOLLOWI NG GROUNDS : 1. THE HONBLE ITAT HAS BEEN PLEASED TO DECIDE THE APP EAL IN ITA NO. 4212/MUM/07 IN THE CASE OF DCIT-1(2) V/S M/S POLYCH EM LTD. VIDE ORDER DATED 19.02.2008, HOLDING THAT RECEIPT OF A L ESSER NUMBER OF SHARES IN LIEU OF ORIGINAL NUMBER OF SHARES CONSEQUENT ON REDUCTION OF SHARE CAPITAL OF THE RELEVANT COMPANY AMOUNTED TO EXTINGU ISHMENT OF RIGHTS OF THE ASSESSEE AND HENCE A TRANSFER WITHIN THE MEAN ING OF SECTION 2(47). 2 M.A.NO.597/MUM/2011 CONSEQUENTLY, LONG TERM CAPITAL LOSS CLAIMED BY THE ASSESSEE HAS BEEN HELD TO BE ALLOWABLE. 2. IN DECIDING THE ISSUE, THE HONBLE ITAT HAS RELIED UPON THE SUPREME COURT JUDGEMENT IN CIT V/S. GRACE COLLIS & OTHERS ( 248 ITR 323), WHERE IT WAS HELD THAT RECEIPT OF SHARES IN THE AMA LGAMATED COMPANY IN LIEU OF SHARES HELD IN THE AMALGAMATING COMPANY AMO UNTED TO EXTINGUISHMENT OF RIGHTS IN SHARES OF THE AMALGAMAT ING COMPANY AND HENCE A TRANSFER WITHIN THE MEANING OF SECTION 2( 47). 3. IT IS SUBMITTED WITH RESPECT THAT IN THE PRESENT CA SE, THE ASSESSEE RECEIVED SHARES IN THE SAME COMPANY IN LIEU OF ORIGINAL SHAR ES HELD THEREIN AND THE PROPORTIONATE SHARE CAPITAL HELD BY THE ASSESSEE RE MAINED THE SAME. HENCE, THERE WAS NO EXTINGUISHMENT OF ANY RIGHT AND THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT V/S. GRACE COLLIS & OTHERS WAS NOT APPLICABLE. 4. IT IS FURTHER SUBMITTED THAT THE SUPREME COURT JUDG EMENT IN THE CASE OF CIT V/S. DALMIA INVESTMENT CO. LTD. (52 ITR 567) HA S NOT BEEN CONSIDERED BY THE HONBLE BENCH. AS PER THIS JUDGEM ENT, THE COST OF ACQUISITION OF THE SHARE ORIGINALLY HELD BY THE ASS ESSEE WAS TO BE SPREAD OVER THE COST OF THE NEW (BONUS) SHARES, AND HENCE THERE WAS NO GAIN OR LOSS ARISING TO THE ASSESSEE IN THE VALUE OF THE SH ARES HELD. 5. IN VIEW OF THE ABOVE, THE HONBLE BENCH MAY BE PLEA SED TO MODIFY THEIR DECISION DATED 19.02.2009 IN ITA NO. 4212/MUM/07 IN THE CASE OF DCIT V/S. M/S POLYCHEM LTD. AND PASS SUCH ORDERS AS MAY BE DEEMED TO BE APPROPRIATE IN THIS CASE. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS SUBMITTED BY THE LEARNED COU NSEL FOR THE ASSESSEE, AN IDENTICAL MISCELLANEOUS APPLICATION WAS FILED BY TH E REVENUE IN THE CASE OF M/S POLYCHEM LTD. AND THE SAME HAS BEEN DISMISSED BY TH E COORDINATE BENCH OF THIS TRIBUNAL VIDE ITS ORDER DATED 23 RD DECEMBER, 2011 PASSED IN M.A. NO. 469/MUM/2011. A COPY OF THE SAID ORDER IS PLACED ON RECORD BEFORE US AND PERUSAL OF THE SAME SHOWS THAT AN IDENTICAL MISCELLANEOUS A PPLICATION FILED BY THE REVENUE IN THE CASE OF M/S POLYCHEM LTD. HAS BEEN D ISMISSED BY THE TRIBUNAL FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 4 OF I TS ORDER : 3 M.A.NO.597/MUM/2011 WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES. THE TRIBUNAL IN THE ORDER PASSED HAS RELIED ON THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF MRS. GRACE COLLIS & OR S (SUPRA). THE LD. DR COULD NOT POINT OUT ANY OTHER FACTUAL ERROR IN THE ORDER OF THE TRIBUNAL. THEREFORE, IN ABSENCE OF ANY APPARENT MISTAKE BEING POINTED OUT IN THE ORDER OF THE TRIBUNAL ANY RECTIFICATION BY THE TRIBUNAL, IN OUR OPINION, WILL AMOUNT TO REVIEW OF ITS OWN ORDER BY THE TRIBUNAL WHICH IS NOT PERMISSIBLE IN LAW. THE APPROPRIATE FORUM FOR THE REVENUE LIES ELSEWHER E AND CERTAINLY NOT THROUGH A MISCELLANEOUS APPLICATION. IN THIS VIEW O F THE MATTER, WE ARE OF THE OPINION THAT THE MISCELLANEOUS APPLICATION FILE D BY THE REVENUE IS DEVOID OF ANY MERIT AND DESERVES TO BE DISMISSED. 3. RESPECTFULLY FOLLOWING THE DECISION OF THE COORD INATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S POLYCHEM LTD. (SUPRA) AND KEEPI NG IN VIEW THAT EVEN THE LEARNED DR HAS AGREED BEFORE US THAT THE MISCELLAN EOUS APPLICATION FILED IN THE PRESENT CASE IS SIMILAR TO THE ONE FILED IN THE CA SE OF M/S POLYCHEM LTD. (SUPRA), WE DISMISS THIS MISCELLANEOUS APPLICATION FILED BY THE REVENUE BEING DEVOID OF ANY MERIT. 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 07-09- 2012. SD/- SD/- (D.K. AGARWAL)) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 7 TH SEP., 2012. WAKODE 4 M.A.NO.597/MUM/2011 COPY TO : 1. APPLICANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. D.R., G-BENCH. (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.