Commissioner Of Income Tax,Kolkata - Iii v. Ruguvalika Trading Pvt. Ltd

O-83 ITA/363/2009 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (Income Tax)ORIGINAL SIDE COMMISSIONER OF INCOME TAX,KOLKATA - III -Versus- RUGUVALIKA TRADING PVT. LTD. BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 17[th] February, 2023 Appearance :Mr. Smarajit Roychowdhury, Adv.…for the appellant. The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ forbrevity) is directed against the order dated 17[th] July, 2009passed by the Income Tax Appellate Tribunal, “D” Bench, Mumbai(the Tribunal) in ITA No.1346/Mum/2008 for the assessment year2004-05. The appeal was admitted on 7[th] January, 2010 on thefollowing substantial question of law: “Whether on the facts and in the circumstances of thecase, the Income-tax Appellate Tribunal has erred in law in holding that the loss on sale and purchase ofmutual fund units was an allowable loss ?" We have heard Mr. Smarajit Roychowdhury, learnedstanding counsel appearing for the appellant/ revenue. After elaborately hearing the learned standing counselfor the appellant and carefully considering the materialsplaced on record, we find that the revenue was aggrieved by theorder passed by the Commissioner of Income Tax (Appeals)-XXX,Mumbai [CIT(A)] dated 19[th] November, 2007 by which theassessee’s appeal was partly allowed by holding that the losssuffered by the assessee on account of bonus stripping isallowable. The learned Tribunal after considering the facts ofthe case and as to how the CIT(A) proceeded, took note of thefact that the issue is covered by the decision of the HighCourt of Bombay in the case Walfort Share and Stock BrokersPvt. Ltd., 310 ITR 421 (Bom). In the memorandum of grounds ofappeal filed before this Court, the revenue does not dispute asregards the effect of the decision of the High Court of Bombay.On the second issue, with regard to the bonus units,the learned Tribunal has once again reappreciated the factualposition and also held that the CIT(A) has relied on thedecision of the Hon’ble Supreme Court in CIT vs. Motilal, 41ITR 382 (SC). Further, on facts, it found that the addition istax neutral because in the subsequent year when the units were sold their costs was taken at ‘Nil’ thereby bringing the entiresale considerable as taxable profit. Thus, we find there is no error in the reasoning adopted by the learned Tribunal for this Court to interferewith the said order. Accordingly, the appeal (ITA/363/2009) filed by therevenue is dismissed and the substantial question of law isanswered against the revenue. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) A/s./S.pal