SHAILESH SUBODHCHANDRA JHAVERI,AHMEDABAD V. THE DY.CIT, CENTRAL CIRCLE-1(1), AHMEDABAD

MA 6/AHD/2025

AI Insights

The case involves Shailesh Subodhchandra Jhaveri, who filed three Miscellaneous Applications against the Deputy Commissioner of Income Tax, Central Circle-1(1), Ahmedabad, seeking rectification of a Tribunal order concerning disallowances of losses on the sale of shares for the Assessment Years 2011-12 and 2012-13. The applications argued that the Tribunal had not properly considered previous decisions allowing similar losses and that the Tribunal's order contained mistakes apparent from the record. However, the Tribunal found that it had adequately considered all relevant precedents and facts, and any disagreement with the Tribunal's interpretation or application of these precedents did not constitute a mistake apparent from the record.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826270 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 09-01-2025
• Other Referred Cases: Honda Siel Power Products Ltd. v. CIT (295 ITR 466), T.S. Balaram, ITO v. Volkart Brothers (82 ITR 50), Ramesh Electric & Trading Co. v. CIT (203 ITR 497), Vicky Jhaveri, Jhaveri Trading, Vicky Rajesh Jhaveri (76 taxmann.com 96)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: TEJ SHAH
• Keywords: Period of limitation; Accommodation entries; Penny stocks
• Section: 147

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER M.A. Nos.6 to 8/Ahd/2025 in I.T.A. Nos.14 to 16/Ahd/2024 (Assessment Years: 2011-12 & 2012-13) Shailesh Subodhchandra Jhaveri, A/2, Manibhadra Flats, New Girdhar Park Society, Ambawadi, Ahmedabad-380015 Vs. Deputy Commissioner of Income Tax, Central Circle-1(1), Ahmedabad [PAN No.ADTPJ0210B] (Appellant) .. (Respondent) Appellant by : Shri Tej Shah, AR Respondent by: Shri Abhijit, Sr. D.R. Date of Hearing 28.11.2025 Date of Pronouncement 05.01.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: The brief facts of the case are that the assessee has filed three Miscellaneous Applications, being MA Nos. 6 to 8/Ahd/2025, arising out of the common order passed by this Tribunal in I.T.A. Nos. 14 to 16/Ahd/2024 for Assessment Years 2011-12 and 2012-13, vide order dated 21.08.2024. The Miscellaneous Applications have been filed under section 254(2) of the Income-tax Act, 1961, seeking rectification of the aforesaid order of the Tribunal. 2. In MA No. 6/Ahd/2025 relating to Assessment Year 2011-12, the grievance of the assessee is against the confirmation of disallowance of loss of ₹1,52,20,891/- on sale of shares of Chandni Textile Engineering Industries Printed from counselvise.com M.A Nos. 6to8/Ahd/2025 (in ITA Nos. 14to16/Ahd/2024) Shailesh Subodhchandra Jhaveri vs. DCIT Asst. Years –2011-12 & 2012-13 - 2– Ltd. The assessee has contended that while deciding the appeal, the Tribunal did not properly consider the decisions of the coordinate Benches in the cases of Vicky Jhaveri and Jhaveri Trading, wherein loss on sale of shares of Chandni Textile Engineering Industries Ltd. was allowed. According to the assessee, the Tribunal erred in observing that no categorical finding was recorded in the case of Jhaveri Trading and in not following the decision in Vicky Jhaveri, despite identical facts. It has further been contended that if the Tribunal intended to take a view different from the coordinate Bench, the matter ought to have been referred to a Larger Bench. Reliance has been placed on the judgment of the Hon’ble Supreme Court in Honda Siel Power Products Ltd. v. CIT (295 ITR 466) to contend that non-following of a coordinate Bench decision constitutes a mistake apparent from record. 3. In MA No. 7/Ahd/2025 relating to Assessment Year 2012-13, the assessee has challenged the disallowance of loss of ₹1,01,726/- on sale of shares of Praneta Industries Ltd. The assessee has submitted that reliance was placed on the decision of the Ahmedabad Bench of the Tribunal in the case of Vicky Jhaveri, wherein loss on sale of shares of Praneta Industries Ltd. was allowed, but the Tribunal failed to consider the same. It has further been contended that the Tribunal relied upon the judgment of the Hon’ble Gujarat High Court in the case of Vicky Jhaveri, though the issue before the High Court was confined to the validity of reopening under section 147 of the Act and not on the merits of the loss. It has also been contended that the Tribunal relied upon the findings of the CIT(A) in Vicky Jhaveri, even though those findings were reversed by the Tribunal, and therefore such reliance was erroneous. Printed from counselvise.com M.A Nos. 6to8/Ahd/2025 (in ITA Nos. 14to16/Ahd/2024) Shailesh Subodhchandra Jhaveri vs. DCIT Asst. Years –2011-12 & 2012-13 - 3– 4. In MA No. 8/Ahd/2025, the assessee has substantially reiterated the very same contentions raised in MA Nos. 6 and 7/Ahd/2025 and has again sought rectification of the order dated 21.08.2024 on the ground that the Tribunal failed to follow the decisions of the coordinate Benches on identical facts. It has also been submitted that all the Miscellaneous Applications have been filed within the period of limitation prescribed under section 254(2) of the Act. 5. We have carefully considered the contents of the three Miscellaneous Applications and perused the common order of the Tribunal dated 21.08.2024 passed in I.T.A. Nos. 14 to 16/Ahd/2024. On a perusal of the said order, it is evident that the Tribunal has passed a detailed and reasoned order after considering the entire factual background of the case, the detailed findings recorded by the Assessing Officer and the Ld. CIT(A), the modus operandi unearthed during the search and survey proceedings in the case of Shri Shirish Chandrakant Shah, and the role of the assessee therein. The Tribunal has also taken note of the judicial precedents relied upon by the assessee, including the decisions in Jhaveri Trading and Vicky Jhaveri, and has recorded specific reasons as to why those decisions were held to be distinguishable and not applicable to the facts of the present case. 6. While passing the order dated 21.08.2024, the Tribunal has discussed in detail the evidences gathered during search and survey, the statements of Shri Shirish Chandrakant Shah and his associates, the findings regarding synchronized trading and accommodation entries, and the fact that the assessee, being a professional stock trader, had systematically incurred losses Printed from counselvise.com M.A Nos. 6to8/Ahd/2025 (in ITA Nos. 14to16/Ahd/2024) Shailesh Subodhchandra Jhaveri vs. DCIT Asst. Years –2011-12 & 2012-13 - 4– in multiple penny stock companies. The Tribunal has also considered the binding judgment of the Hon’ble Gujarat High Court in Vicky Rajesh Jhaveri (76 taxmann.com 96), as affirmed by the Hon’ble Supreme Court, and has applied the principles laid down therein to the facts of the assessee’s case. The Tribunal has further examined the issue of cross-examination, the plea regarding transactions being through banking channels, and the argument that the scrips were not declared penny stocks by SEBI, and thereafter arrived at a conscious and reasoned conclusion on merits. 7. The scope of rectification under section 254(2) of the Act is very limited. A mistake apparent from record must be an obvious, patent and self- evident mistake and not something which requires long-drawn reasoning or reappreciation of evidence. The Hon’ble Supreme Court in T.S. Balaram, ITO v. Volkart Brothers (82 ITR 50) has held that a debatable issue of law cannot be regarded as a mistake apparent from record. The Hon’ble Bombay High Court in Ramesh Electric & Trading Co. v. CIT (203 ITR 497) has categorically held that the Tribunal cannot review its own order under the garb of rectification proceedings. 8. The reliance placed by the assessee on the decision of the Hon’ble Supreme Court in Honda Siel Power Products Ltd. is misplaced. In that case, rectification was permitted because a binding judgment cited before the Tribunal was completely omitted from consideration. In the present case, the Tribunal has not ignored the decisions relied upon by the assessee; rather, it has consciously considered them and, after detailed discussion, has taken a view that those decisions are distinguishable on facts. Mere non-acceptance Printed from counselvise.com M.A Nos. 6to8/Ahd/2025 (in ITA Nos. 14to16/Ahd/2024) Shailesh Subodhchandra Jhaveri vs. DCIT Asst. Years –2011-12 & 2012-13 - 5– of the assessee’s contention or taking a different view on the same set of facts does not constitute a mistake apparent from record. 9. In the present case, the assessee, through these Miscellaneous Applications, is essentially seeking a reappreciation of evidence and a review of the detailed findings already recorded by the Tribunal in its order dated 21.08.2024, which is clearly beyond the scope of section 254(2) of the Act. 10. In view of the above discussion, we are of the considered opinion that the order of the Tribunal dated 21.08.2024 does not suffer from any mistake apparent from the record. The Tribunal has taken note of all factual and legal aspects while adjudicating the appeals, and the present Miscellaneous Applications are nothing but an attempt to seek review of the said order, which is impermissible in law. 11. Accordingly, all the three Miscellaneous Applications, namely MA Nos. 6 to 8/Ahd/2025, are dismissed. This Order pronounced in Open Court on 05/01/2026 Sd/- Sd/- (M. V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 05/01/2026 Tanmay, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "