DAXATA FINANCE & INVESTMENT P. LTD, V. ITO WD 8(1)(3),

MA 705/MUM/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4492 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: K
• Assessment Year: 2004-2005
• Appeal Filed On: 16-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P K PARIDA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI N.V.VASUDEVAN, JM M.A.NO.705/MUM/2009 (ARISING OUT OF ITA NO.543/MUM/2008 : ASST.YEAR 200 4-2005) M/S.DAKSHATA FINANCE & INVESTMENT PRIVATE LIMITED, 141, LAXMI PLAZA LAXMI INDUSTRIAL ESTATE, ANDHERI LINK ROAD, ANDHERI (WEST),MUMBAI 400 053. PA NO.AAACD9845R. VS. THE INCOME TAX OFFICER WARD 8(1)(3) MUMBAI. (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI P.K.PARIDA RESPONDENT BY : SHRI S.M.KESHKAMAT O R D E R PER R.S.SYAL (AM) : THIS MISCELLANEOUS APPLICATION U/S.254(2) OF THE IN COME-TAX ACT, 1961 HAS BEEN MOVED BY THE ASSESSEE PRAYING FOR THE RECTIFIC ATION OF THE ORDER OF THE TRIBUNAL DATED 6 TH AUGUST, 2009 IN ITA NO.543/MUM/2008. THE LEARNED C OUNSEL FOR THE ASSESSEE CONTENDED THAT THE TRIBUNAL ERRED IN NOT GIVING ANY FINDING ABOUT THE SECOND PART OF GROUND NO.1 QUA THE PROFIT ON SHARES PURCHASED AND SOLD DURING THE YEAR. IN THE OPPOSITION THE LEARNED DEPARTMENT AL REPRESENTATIVE RELIED ON THE IMPUGNED ORDER AND CONTENDED THAT THERE WAS DISCUSS ION IN THE IMPUGNED ORDER ON BOTH THE ISSUES, VIZ, THE ADDITION ON ACCOUNT OF VA LUATION OF CLOSING STOCK AND ALSO ON ACCOUNT OF PROFIT ON PURCHASE AND SALE OF SHARES . 2. HAVING HEARD THE RIVAL PARTIES AND PERUSED THE R ELEVANT MATERIAL ON RECORD, IT IS FOUND FROM PARA 3.2 OF THE TRIBUNAL ORDER THAT A CATEGORICAL FINDING HAS BEEN RECORDED THAT THE ASSESSEE WAS CARRYING ON THE BUSI NESS OF TRADING OF SHARES AND THEREFORE THE ASSESSEE HAD TO BE TREATED AS CARRYIN G ON THE SPECULATION BUSINESS IN SHARES BY VIRTUE OF SUCH DEEMING PROVISION. FURTHER IN PARA 3.3 VARIOUS SECTIONS HAVE BEEN CONSIDERED AND AT THE END OF THE PARA IT HAS BEEN MENTIONED THAT THE MA NO.705/MUM/2009 M/S.DAKSHATA FINANCE & INVESTMENT PVT.LTD. 2 COMBINED READING OF THESE PROVISIONS MAKES IT CLEAR THAT SECTION 73 HAS AN OVERRIDING EFFECT. THEREFORE LOSS IN THE BUSINESS O F TRADING IN SHARES BY A COMPANY HAS TO BE TREATED AS LOSS FROM SPECULATION BUSINESS AND, CONSEQUENTLY, THE ASSESSEE WOULD NOT BE ENTITLED TO SET OFF THE SAME AGAINST THE OTHER INCOMES. 3. HERE IT IS IMPORTANT TO MENTION THAT WE ARE DEAL ING WITH THE PROCEEDINGS U/S.254(2), THE SCOPE OF WHICH IS RESTRICTED ONLY T O RECTIFYING ANY MISTAKE APPARENT FROM RECORD. SUCH MISTAKE SHOULD BE APPARENT ON THE FACE OF THE ORDER WITHOUT GOING INTO THE DETAILED DELIBERATIONS FROM BOTH THE SIDES. RECENTLY THE BOMBAY HIGH COURT IN CIT VS. EARNEST EXPORTS LTD. 2010-TIOL-164-XC-MUM-B OM HAS HELD THAT THE TRIBUNAL CANNOT REVIEW THE ORDER IN T HE GARB OF RECTIFICATION. EARLIER THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. RAMESH ELECTRIC AND TRADING CO. [(1993) 203 ITR 497 (BOM.)] HAS GONE TO THE EXTENT OF HOLDING THAT EVEN FAIL URE TO CONSIDER AN ARGUMENT MAY BE AN ERROR OF JUDGMENT, BUT IT CANNOT BE HELD AS ERROR APPARENT FROM RECORD, REQUIRING THE EXERCISE OF A NY POWER U/S 254(2) OF THE ACT. IN VIEW OF THE FOREGOING DISCUSSION ON THE FACTUAL MATRIX OF THE CASE AS TESTED ON THE TOUCHSTONE OF THE LEGAL POSITION EMANATING FROM THE TWO JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE CO NSIDERED OPINION THAT THERE IS NO MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL WARRA NTING ANY RECTIFICATION. 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED ON THIS 23 RD DAY OF MARCH 2010. SD/- SD/- ( N.V.VASUDEVAN ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 23 RD MARCH, 2010. DEVDAS* MA NO.705/MUM/2009 M/S.DAKSHATA FINANCE & INVESTMENT PVT.LTD. 3 COPY TO : 1. THE APPLICANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - VIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.