Kisan Discretionary Family Trust, Ahmedabad V. The ACIT., Cent.Circle-1(1), Ahmedabad

MA 88/AHD/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7112 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 1996-1997
• Appeal Filed On: 15-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S A BOHRA
• Assessee Lawyers: S N SOPARKAR
• Section: 260A

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH CAHMEDABAD BEFORE S/SHRI D. K. TYAGI, J.M. AND A. K. GARODIA, A.M. M.A. NO.88/AHD/2010 IN ITA NO.608/AHD/2005 ASST. YEAR 1996-97 M.A. NO.89/AHD/2010 IN C.O. NO.158/AHD/2007 ASST. YEAR 2000-01 KISAN DISCRETIONARY FAMILY TRUST, NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD. V/S . DY. CIT, CIR-10, AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI S. N. SOPARKAR, SR.ADVOCATE RESPONDENT BY:- SHRI S. A. BOHRA, SR.DR DATE OF HEARING :23/9/2011 DATE OF PRONOUNCEMENT : 31.10.2011. O R D E R PER D. K. TYAGI, JUDICIAL MEMBER. BOTH THE MISCELLANEOUS APPLICATIONS HAVE BEEN FILE D BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER DATED 31.07 .2009 IN ITA NO.542/AHD/2005(REVENUES APPEAL) AND ITA NO.608/AH D/2005 (ASSESSEES APPEAL) FOR ASST. YEAR 1996-97 AND ITA NO.796/AHD/2004 (REVENUES APPEAL) & C.O. NO.158/AHD/2007 (ASSESSEE S C.O.) FOR ASST. YEAR 2000-01. SINCE BOTH THE MISCELLANEOUS APPLICAT IONS PERTAIN TO THE M.A. NO.88/AHD/2010 IN ITA NO.608/AHD/2005 ASST. YE AR 1996-97 M.A. NO.89/AHD/2010 IN C.O. NO.158/AHD/2007 ASST. Y EAR 2000-01 2 SAME ASSESSEE, THESE ARE TAKEN UP FOR DISPOSAL BY T HIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. MA NO.88/AHD/2010 ARISING OUT OF ITA NO.608/AHD/200 5 ASST. YEAR 1996-97 2. IN THIS MISCELLANEOUS APPLICATION THE ASSESSEE S UBMITTED AS UNDER : I. THAT BEING AGGRIEVED BY THE CONSOLIDATED ORDER OF D EPARTMENTAL APPEAL IN ITA NO.542/AHD/2005 & ITA NO.608/AHD/200 5 (ASSESSEE) FOR ASST. YEAR 1996-97 AND 796/AHD/2004 (DEPT.) & C.O. NO.158/AHD/2007 (ASSESSEE) FOR ASST. YEAR 2000 -01 PASSED BY HONBLE TRIBUNAL, BENCH C AHMEDABAD DT.31.07.2009, ASSESSEE IS OF THE VIEW THAT THERE I S A MISTAKE APPARENT ON RECORD GOING TO THE ROOT OF THIS ORDER RENDERING THE ALTERNATE FINDING ADVERSE TO THE ASSESSEE AND HENCE THIS MISCELLANEOUS APPLICATION IS FILED FOR THE KIND CON SIDERATION OF HONBLE TRIBUNAL FOR THE YEAR UNDER REFERENCE. II. A) VIDE DISCUSSION AT PARAS 15 TO 17 ON PAGES 10 T O 13 HONBLE TRIBUNAL REJECTED ASSESSEES CONTENTION THAT DEDUCT ION U/S 80IA FOR DETERGENT DIVISION SHOULD BE SET OFF WITHO UT ADJUSTING THE LOSS OF ANOTHER DIVISION VIZ. S.S.P. DIVISION AND PACKAGING DIVISION. B) ASSESSEE RELIED ON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF CANARA WORKSHOPS (P) LTD. 161 ITR 32 1 AND ITAT MUMBAI BENCH B IN THE CASE OF MEERA COTTON & SYNTHETIC MILLS (P) LTD. IN ITA NO.5901/MUM/2007 RE PORTED IN 125 TTJ 274 (MUM) AFTER CONSIDERING THE SUPREME COURT M.A. NO.88/AHD/2010 IN ITA NO.608/AHD/2005 ASST. YE AR 1996-97 M.A. NO.89/AHD/2010 IN C.O. NO.158/AHD/2007 ASST. Y EAR 2000-01 3 DECISIONS IN THE CASE OF CANARA WORKSHOPS P. LTD. ( SUPRA) AND SYNCO INDUSTRIES LTD. 299 ITR 444. MOREOVER, AS SESSEE ALSO RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT REJECTING TAX APPEAL U/S 260A OF IT ACT IN THE CASE OF K. KHODIDAS PATEL SPECIFIC FAMILY TRUST VIDE TAX APPEA L NO.2 OF 1999. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE HON BLE TRIBUNAL HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE OR DERS OF LOWER AUTHORITIES, WHICH REQUIRES TO BE RECTIFIED. TAKING INTO ACCOUNT THE AVERMENTS MADE IN THIS PETI TION, IT IS RESPECTFULLY SUBMITTED THAT AFTER HEARING BOTH THE SIDES, APPROP RIATE ORDER MAY BE PASSED THEREON. 3. AT THE TIME OF HEARING THE LD. COUNSEL OF THE AS SESSEE PLACING RELIANCE ON THE CONTENTS OF THE ABOVE MISC. APPLICA TION PRAYED THAT IN VIEW OF THE FACT THAT HONBLE TRIBUNAL DID NOT CONS IDER THE CASE LAWS OF HON. JURISDICTIONAL HIGH COURT AS WELL AS HONBLE A PEX COURTS DECISIONS ON THE ISSUE INVOLVED IN THE APPEAL, RELI ED BY THE ASSESSEE AT THE TIME OF HEARING OF APPEAL, THE ORDER DATED 31.07.20 09, MAY KINDLY BE RECALLED. 4. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THER E IS NO MISTAKE APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL, TH EREFORE, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE DES ERVES TO BE DISMISSED. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT DURING THE COURSE OF HEARING OF THE APPEAL A CHART WAS FILED SHOWING THE RELIANCE PLACED BY THE ASSESSEE IN RESPECT OF EACH GROUND OF APPEAL. AFTER M.A. NO.88/AHD/2010 IN ITA NO.608/AHD/2005 ASST. YE AR 1996-97 M.A. NO.89/AHD/2010 IN C.O. NO.158/AHD/2007 ASST. Y EAR 2000-01 4 GOING THROUGH THIS CHART, WE FIND THAT WHILE PASSIN G THE ORDER DATED 31.07.2009, INADVERTENTLY THE CASE LAWS RELIED ON B Y THE ASSESSEE WERE NOT CONSIDERED BY THE BENCH. THUS A MISTAKE APPARENT FR OM RECORD HAS CREPT IN IN OUR ORDER. THEREFORE, THE ORDER PASSED BY THE TRIBUNAL IS HEREBY RECALLED. THE REGISTRY IS DIRECTED TO FIX THE APPEA L IN DUE COURSE. THE MISC. APPLICATION FILED BY THE ASSESSEE IS ALLOWED. M.A. NO.89/AHD/2010 ARISING OUT OF ASSESSEES C.O.N O.158/AHD/2007 ASST. YEAR 2000-01 6. IN THIS MISCELLANEOUS APPLICATION THE ASSESSEE S UBMITTED AS UNDER : I. THAT BEING AGGRIEVED BY THE CONSOLIDATED ORDER O F DEPARTMENTAL APPEAL IN ITA NO.542/AHD/2005 & ASSESSEES ITA NO.608/AHD/2005 FOR ASST. YEAR 1996-97 AND DEPARTME NTAL APPEAL IN ITA NO.796/AHD/2004 & ASSESSEES C.O. NO.158/AHD /2007 FOR ASST. YEAR 2000-01 PASSED BY HONBLE TRIBUNAL, BENC H C AHMEDABAD DT.31.07.2009, ASSESSEE IS OF THE VIEW TH AT THERE IS A MISTAKE APPARENT ON RECORD GOING TO THE ROOT OF THI S ORDER RENDERING THE ALTERNATE FINDING ADVERSE TO THE ASSESSEE AND H ENCE THIS MISCELLANEOUS APPLICATION IS FILED FOR THE KIND CON SIDERATION OF HONBLE TRIBUNAL FOR THE YEAR UNDER REFERENCE. II. HONBLE TRIBUNAL REJECTED ASSESSEES GROU ND THAT VYAJ BADLA INCOME SHOULD BE ASSESSED AS CAPITAL GAIN INSTEAD O F INCOME FROM OTHER SOURCES. THE CONTENTION OF THE ASSESSEE THAT ASSESSEE CARRIED OUT PURCHASE AND SALE OF SHARES ON STOCK EXCHANGE W AS NOT TAKEN INTO CONSIDERATION. M.A. NO.88/AHD/2010 IN ITA NO.608/AHD/2005 ASST. YE AR 1996-97 M.A. NO.89/AHD/2010 IN C.O. NO.158/AHD/2007 ASST. Y EAR 2000-01 5 TAKING INTO ACCOUNT THE AVERMENTS MADE IN THIS PETI TION, IT IS RESPECTFULLY SUBMITTED THAT AFTER HEARING BOTH THE SIDES, APPROP RIATE ORDER MAY BE PASSED THEREON. 7. AT THE TIME OF HEARING THE LD. COUNSEL OF THE AS SESSEE PLACING RELIANCE ON THE ABOVE CONTENTS PRAYED THAT THE ORDE R PASSED BY THE TRIBUNAL MAY KINDLY BE RECALLED. 8. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THER E IS NO MISTAKE APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL, TH EREFORE, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE DES ERVES TO BE DISMISSED. 9. AFTER HEARING BOTH THE PARTIES AND GOING THROUGH THE RECORD WE FIND THAT THIS ISSUE HAS BEEN DEALT BY THE TRIBUNAL IN I TS ORDER AS UNDER :- 25. AGGRIEVED THE ASSESSEE CAME IN C.O. BEFORE US. AFTER HEARING THE RIVAL CONTENTIONS AND GOING THROUGH THE CASE RECORD S, WE FIND THAT THE INCOME ARISEN TO THE ASSESSEE IS INTEREST INCOME TA XABLE UNDER THE HEAD INCOME FROM OTHER SOURCES AND NOT BY WAY OF DIFFE RENCE BETWEEN THE PURCHASE PRICE AND SALE PRICE OF THE SHARES. THE IN COME ARISEN BY WAY OF VYAJ BADLA RATE FIXED BY THE STOCK EXCHANGE AT THE END OF EACH SETTLEMENT IS INCOME FROM OTHER SOURCES. WE FIND THAT THE CIT( A) HAS RECORDED A CATEGORICAL FINDING THAT THE AMOUNT ADVANCED BY THE ASSESSEE TO THE STOCK BROKERS WAS USED BY THE BROKERS IN THE BADLA FINA NCE. AS PER THE STOCK EXCHANGE RULES, THE BADLA FINANCE IS TO BE BACKED B Y TRANSACTIONS OF SHARES AND THE ASSESSEE IS NOT ALLOWED FREE SALE OF SCRIP. AS PER THE STOCK EXCHANGE RULES, THE SCRIP ARE AUTOMATICALLY SOLD AT THE END OF THE SETTLEMENT AND AFTER ADJUSTING THE BADLA RATES AND THE AMOUNT AVAILABLE WITH THE STOCK BROKERS IS AGAIN PUT TO USE FOR PURC HASE OF NEW SCRIP AT THE BEGINNING OF NEXT SETTLEMENTS. THE SEQUENCE OF SALE & PURCHASE IS A CONTINUED PROCESS AT THE END OF SETTLEMENT AND AT T HE BEGINNING OF NEXT SETTLEMENT. WE ARE OF THE VIEW THAT IN THIS WAY, TH E ASSESSEE GETS ONLY INCOME FROM THE BADLA RATES FIXED BY THE STOCK EXCH ANGE AND THERE IS NO ELEMENT OF RISKS IN DEALING WITH SHARES IN THESE TR ANSACTIONS. ACCORDINGLY, THE CIT(A) HAS RIGHTLY HELD THE VYAJ BADLA AS INCOM E FROM OTHER SOURCES AND WE CONFIRM THE SAME. THIS ISSUE IN ASSESSEES C O IS DISMISSED. M.A. NO.88/AHD/2010 IN ITA NO.608/AHD/2005 ASST. YE AR 1996-97 M.A. NO.89/AHD/2010 IN C.O. NO.158/AHD/2007 ASST. Y EAR 2000-01 6 SINCE THE ASSESSEE HAS NOT POINTED OUT ANY MISTAKE APPARENT FROM THE RECORD IN THE ABOVE FINDINGS OF THE TRIBUNAL, THE M ISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DEVOID OF ANY MERIT AND THE SAME IS HEREBY REJECTED. MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS REJECTED. 10. IN THE RESULT, M.A. NO.88/AHD/2010 IS ALLOWED W HEREAS M.A. NO.89/AHD/2010 IS REJECTED. ORDER PRONOUNCED IN OPEN COURT ON 31/10 /2011 SD/- SD/- (A. K. GARODIA) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD M.A. NO.88/AHD/2010 IN ITA NO.608/AHD/2005 ASST. YE AR 1996-97 M.A. NO.89/AHD/2010 IN C.O. NO.158/AHD/2007 ASST. Y EAR 2000-01 7 1.DATE OF DICTATION 23/9/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 19/10/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..