CIT, PATIALA V. M/S VARREN FINANCIAL SERVICES LTD. PATIALA

ITA/569/2009

AI Insights

The case involves an appeal by the Commissioner of Income Tax against the decision of the Income Tax Appellate Tribunal, Chandigarh, which upheld the CIT (A)'s decision. The dispute centered on the appropriate rate per share to be used in assessing business and speculation losses claimed by M/s Varren Financial Services Ltd for the assessment year 1998-99. The Assessing Officer had initially assessed the rate at Rs.92.90 per share, the highest rate on the trading day, but the CIT (A) and the Tribunal later accepted Rs.88 per share, the lowest rate, as the correct rate for assessment. The revenue contended that the higher rate should have been applied, arguing that the assessee failed to substantiate the actual trading rate of the shares.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 689562 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 13-11-2009
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Indian Evidence Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: URVASHI DHUGGA
• Keywords: Best Judgment Assessment; Business loss; CIT(A); ITAT; Shares; Speculation loss
• Section: 260A; 114

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.569 of 2009 (O&M) Date of decision: 13.11.2009 The Commissioner of Income Tax. -----Appellant Vs. M/s Varren Financial Services Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present:- Ms. Urvashi Dhugga, Standing Counsel for the revenue. ----- ORDER: 1. This appeal has been preferred by revenue under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 25.3.2009 of the Income Tax Appellate Tribunal, Chandigarh Bench ‘A’ in I.T.A. No.763/Chd/2008 for the assessment year 1998-99, proposing to raise following substantial questions of law:- “(i) Whether in the facts and circumstances of the case, the ITAT was justified in taking the rate of Rs.88 per share i.e. the minimum at which the said shares were traded on that day, ignoring the fact that the said shares had been traded at the highest rate of Rs.92.90 per share and that ITA No.569 of 2009 the assessee had failed to substantiate the rate at which the shares were actually traded, which fact was in its exclusive knowledge. (ii) Whether in the facts and circumstances of the case, the ITAT was justified in not giving the benefit of the provisions of Section 114 of the Indian Evidence Act to the Revenue by applying the highest rate at which the impugned shares had been traded on that day. (ii) Whether in the facts and circumstances of the case, the ITAT was justified in not disposing of, by passing a speaking order, the specific ground taken before it by the Revenue, questioning the failure of CIT(A) to invoke the provisions of Section 114 of the Indian Evidence Act and in not applying the highest rate at which the impugned shares had been traded on that day.” 2. The assessee made claim for business loss and speculation loss in the business of shares but the said claim was turned down by the Assessing Officer by making best judgment assessment, in absence of books of account. On appeal, the CIT (A) partly allowed relief to the assessee by holding that rate per share should have been taken to be Rs.88/-, as against the rate of Rs.92.90 per share, assessed by the Assessing Officer. The Tribunal upheld the view of the CIT(A) by giving reasons. 3. Learned counsel for the revenue submits that the CIT (A) as well as the Tribunal should have assessed the rate at Rs.92.90 per share. 2 ITA No.569 of 2009 4. We find that the Tribunal has given reasons for accepting the view of CIT(A). Relevant observations of the Tribunal are as under:- “........Though, there is a force in the question to the effect that when the rate was between Rs.88/- to Rs.99.90 per share, then why the assessee sold at the lower rate, still, we are in agreement with the conclusion drawn in the impugned order in taking the actual sale of shares @ Rs.88/- per share which was the lowest quoted rate prevailing in the stock market and no sale brokerage was paid by the appellant. In view of these facts, we have not found any infirmity in the impugned order, consequently upheld.” 5. The matter is clearly in the realm of appreciation of evidence. No substantial question of law arises. 6. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 13, 2009 ( GURDEV SINGH ) ashwani JUDGE 3 "