Accra Investments Pvt. Ltd v. The Income Tax Officer

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.2189 OF 2012IN INCOME TAX APPEAL NO. 953 OF 2012WITH INCOME TAX APPEAL NO.953 OF 2012 Accra Investments Pvt. Ltd. ..Appellant. v.The Income Tax officer...Respondent. Mr. J.D.Mistri,Sr. Advocate with Mr. R.Murlidhar with Atul K. Jasani for the Appellant.Mr.A.R.Malhotra for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 15TH JANUARY, 2013 PC: This appeal against the order dated 25/4/2012 of the Tribunal for assessment year 2006-07 was admitted on 25/9/2012.The appellant had also taken out the above Notice of Motion seeking a stay of recovery of the disputed tax and interest as a consequence of the impugned order of the Tribunal till the disposal of the appeal. 2)The appeal was placed on board today for final hearing of the appeal along with the notice of motion. During the course of the hearing today it was pointed out to us that consequent to the impugned order of the Tribunal, the appellant had on 13/8/2012 filed a Misc. Application under Section 254(2) of the Income Tax Act, 1961 seeking to rectify some inadvertent errors which according to the respondent had crept in the impugned order. We find that some of the alleged errors pointed out in the Misc. Application would go to the root of the matter and if the alleged errors are found to be correct then the appreciation of the impugned order would be entirely different while considering whether the investment in shares of Millennium Alcobev Pvt. Ltd. (MAPL) was a capital asset or not. For instance, in the Misc. Application it has been pointed out that the impugned order records that the respondent had purchased the shares at a very high price of Rs.21/- and that no investor would purchase share at such high price. It is the case of the respondent that one of the other investors in MAPL had invested at the rate of Rs.87.95 per share while subscribing to 40% of the shareholding of MAPL. The aforesaid fact of high price was one of the factor which seems to have weighed with the Tribunal to hold that the appellant was trader in the shares of MAPL and not an investor. Similar other such errors have been pointed out in the respondent's Misc. Application which would be crucial to determine the issues arising in this appeal. Therefore, it would be in the interest of justice that for the proper disposal of the appeal the Misc. Application filed in August 2012 is first disposed of by the Tribunal and only thereafter this appeal be heard. 3) We are informed that Misc. Application filed by the respondent has been fixed on 22/3/2012 before the Tribunal. Counsel for the parties are at liberty to mention the Misc. Application before the Tribunal and have the matter placed for hearing before the Tribunal on a date earlier to 22/3/2012 subject to the convenience of the Tribunal. ASN 4) As we are of the view that the Misc. Application must be disposed of first before the appeal can be heard on merits, it would be appropriate that the revenue not commence any recovery proceeding consequent to the impugned order till the Misc. Application has been disposed and for a period of three weeks thereafter, if the order is adverse to the respondent. Accordingly, we dispose of the notice of motion by the above directions. Notice of Motion is disposed of accordingly. (M.S.SANKELCHA, J.) (J.P. DEVADHAR, J.)