ITO 6(2)(4), MUMBAI V. ENVISION INVESTMENT & FINANCE P. LTD, MUMBAI

MA 852/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4902 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 17-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Speculation loss
• Section: 143(3); 43(5); 73; 88E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) MA NO. 852/MUM/2017 (ITA NO. 2138/MUM/201 0 ) ASSESSMENT YEAR: 2006 - 07 INCOME TAX OFFICER 6(2)(4), ROOM NO. 513, 5 TH FLOOR, AAYAKAR BHAVAN, MK ROAD, MUMBAI - 400020. VS. M/S ENVISION INVESTMENT & FINANCE PVT. LTD., 401, VYAPAR BHAWAN, 368/70, NARSI NATHA STREET, MUMBAI - 400009 PAN NO. AAACE2990G APPELLANT RESPONDENT REVENUE BY : MR. AMIT PRATAP SINGH, SR. DR ASSESSEE BY : MR. NISH I T GANDHI, AR DATE OF HEARING : 22/11/2019 DATE OF PRONOUNCEMENT: 19 /02/2020 ORDER PER N.K. PRADHAN, AM BY MEANS OF THIS MISCELLANEOUS APPLICATION (MA), THE APPLICANT SEEKS RECTIFICATION OF THE ORDER DATED 07.08.2015 PASSED BY THE ITAT F BENCH MUMBAI (ITA NO. 2138/MUM/2010 ) FOR THE ASSESSMENT Y EAR (AY) 2006 - 07 . 2. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITS THAT IN THIS CASE THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 24.11.2008 DETERMINING A TOTAL INCOME AT RS.68,99,34,450/ - AS AGAINST RETURNED INCOME OF M/S ENVISION INVESTMENT & FINANCE PVT. LTD. MA NO. 852/MUM/2017 2 RS.68,19,18,744/ - . DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER (AO) DISALLOWED SET OFF OF LOSSES AMOUNTING TO RS.68,21,171/ - TREATING IT AS SPECULATION LOSS INSTEAD OF BUSINESS LOSS AS CLAIMED BY THE ASSESSEE. THE AO ALSO DISALLOWED CREDIT FOR STT PAID U/S 88E RELATABLE TO STT P AID FOR TRANSACTION HELD AS SPECULATIVE TRANSACTION. THE LD. DR FURTHER EXPLAINS THAT THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO VIDE ORDER DATED 14.12.2009 CONFIRMED THE AOS ACTION OF TREATING SHARE TRADING ACTIVITY AS SPECULATION. HOWEVER, AS REGARDS APPLICABILITY OF SECTION 43(5 )(D), THE CIT(A) HELD THAT THE N OTIFICATION CAME INTO EFFECT FROM 25.01.2006 AND THE ACT WAS AMENDED W.E.F. 01.4.2006, HENCE, THE SAME IS APPLICABLE FROM AY 2006 - 07 ONWARDS. THUS IT WAS HELD THAT PROFIT EARNED UPTO 2 5 .01.2006 IS IN THE NATURE OF SPECULATION AND THE ASSESSEE WAS ALLOWED SET OFF AGAINST LOSS INCURRED IN TRADING OF SHARES. IT IS FURTHER STATED THAT THE DECISION OF THE CIT(A) WAS NOT ACCEPTED AND SECOND APPEAL WAS PREFERRED BEFORE THE TRIBUNAL. FINALLY, THE LD. DR SUBMITS THAT THE TRIBUNAL IN THE INSTANT CASE HAS NOT FOLLOWED CORRECTLY THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF DLF COMMERCIAL DEVELOPERS LTD. 261 CTR (DEL) 127 AND THEREFORE, THE IMPUGNED ORDER MAY BE RECTIFIED. 3. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE EXPLAINS THAT THERE BEING NO MISTAKE APPARENT FROM RECORD, THE PRESENT MA BEING DEVOID OF MERIT BE DISMISSED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE I MPUGNED ORDER, THE TRIBUNAL FOLLOWED THE JUDGMENT OF THE M/S ENVISION INVESTMENT & FINANCE PVT. LTD. MA NO. 852/MUM/2017 3 HONBLE DELHI HIGH COURT IN DLF COMMERCIAL DEVELOPERS LTD . (SUPRA), WHEREIN THE APPLICABILITY OF EXPLANATION TO SECTION 73 VIS - A - VIS DERIVATIVE TRANSACTIONS U/S 43(5) HAS BEEN DEALT WITH AND DIRECTED THE AO TO ALLOW THE SET OFF OF LOSS AGAINST THE GAIN S . A PERUSAL OF THE ABOVE FACTS CLEARLY INDICATE THAT THE APPLICANT HAS NOT POINTED OUT ANY MISTAKE APPARENT FROM THE RECORD. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS MISTAKE AND NOT SOMETHIN G WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD. THIS VIEW IS SUPPORTED BY THE DECISION OF THE HONBL E SUPREME COURT IN T.S. BALARAM, ITO V. VOLKART BROS ., (1971) 82 ITR 50 (SC), MASTER CONSTRUCTION CO. P. LTD. V. STATE OF ORISSA , AIR 1966 SC 1047, KARAM CHAND THAPAR & BROS. (COAL SALES) LTD. V. STATE OF U.P. (1976) TAX LR 1921, 1927 (SC) AND CCE V. ASCU LTD ., (2003) 9 SCC 230, 232. IN FACT, NOT A SINGLE ERROR IN THE IMPUGNED ORDER HAS BEEN POINTED OUT BY THE APPLICANT. WHAT THE APPLICANT WANTS IS A REVIEW OF THE ORDER PASSED BY THE TRIBUNAL. THE TRIBUNAL IS A CREATURE OF THE STATUTE. THE TRIBUNAL CANNOT R EVIEW ITS OWN DECISION UNLESS IT IS PERMITTED TO DO SO BY THE STATUTE. THE HONBLE SUPREME COURT HAS HELD IN PATEL NARSHI THAKERSHI V. PRADYUMANSINGHJI ARJUNSINGHJI [AIR 1970 SC 1273] THAT THE POWER TO REVIEW IS NOT AN INHERENT POWER. 5. IN VIEW OF THE FAC TUAL SCENARIO AND POSITION OF LAW DELINEATED HEREINBEFORE, THE PRESENT MA, BEING DEVOID OF MERIT, IS DISMISSED. M/S ENVISION INVESTMENT & FINANCE PVT. LTD. MA NO. 852/MUM/2017 4 ORDER PRONOUNCED IN THE OPEN COURT ON 19 /02/2020. SD/ - SD/ - ( C.N. PRASAD ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 19 /02/2020 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI