Darashaw & Co. Pvt. Ltd v. The Dy. Commissioner Of Income Tax-4(1

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1741 OF 2010 Darashaw & Co. Pvt. Ltd. ...Appellant. vs. The Dy. Commissioner of Income Tax-4(1)....Respondent. Mr. S.E.Dastur, Senior Counsel along with Mr. Madhur Agarwal, Shabnam Shaikh and Sanjay Sanghvi i/by Khaitan & Co. for the Appellant. Mr. Vimal Gupta, Sr. Advocate with Mr. Suresh Kumar for the Respondent. CORAM : MOHIT S. SHAH, C.J. AND M.S. SANKLECHA, J. DATE : 01 July, 2013 PC: This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (“the Act”) challenging the order dated 3 November 2009 by the Income Tax Appellate Tribunal, Mumbai (“the Tribunal”) in respect of assessment year 2004-05. 2)The appellant assessee has raised the following questions of law for the consideration of this Court. i)Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that Derivative transactions are speculative transactions covered under Section 43(5) of the said Act? ii)Whether on the facts and circumstances of the case and in law the Tribunal was justified in holding that clause (d) of Section 43(5) of the said Act is not clarificatory and prospective in nature and will be effective from 1 April 2006 and will be applicable to assessment year 2006-07 onwards? iii)Whether on the facts and circumstances of the case and in law the Tribunal was justified in holding that the loss incurred in transactions in Derivatives are speculative losses and therefore can not be regarded as normal business loss? 3)Having heard Mr. Gupta, learned Senior Counsel for the revenue and Mr. Dastur, learned Senior Counsel for the appellant assessee, we find that the above questions arose for consideration of this Court in Commissioner of Income Tax v. Bharat R. Ruia (HUF) (2011) 337 ITR 452. This Court in the above case of Bharat R. Ruia (HUF) (supra) came to the conclusion that the derivative transaction for the period prior to assessment year 2006-07 is covered under Section 43(5) as speculative transaction. This Court also held that clause (d) of Section 43(5) of the Act introduced with effect from 1 April 2006 is not retrospective or clarificatory but only prospective. In the facts of the present case, we are concerned with the assessment year 2004-05 and therefore, the decision of this Court in the case of Bharat Ruia (HUF) (supra) is squarely applicable. 4)Since the matter is squarely covered by the aforesaid decision of this Court, no further discussion would have been required. However, the learned Counsel for the appellant-assessee submitted that the decision of this Court in Bharat Ruia (HUF) (supra) requires reconsideration. We are not inclined to consider the request for ASN reconsideration of the said decision. Even otherwise the decision of this Court in Bharat Ruia (HUF) (supra) has been carried in appeal to the Supreme Court, which has granted leave to appeal and the matter is now pending at the stage of final hearing as Civil Appeal Nos.4422/2012 and 4423/2012 to be heard by the Supreme Court along with appeals of M/s. A.G. Enterprises and several other matters. 5)In view of the above, we see no reason to entertain the plea of Mr. Dastur, learned Senior Counsel for the appellant assessee that the decision of this Court in Bharat Ruia (HUF) (supra) requires reconsideration. 6)In our view, as the issue is covered by the decision of this Court in Bharat Ruia (HUF) (supra), no substantial question of law arises for consideration. 7)Appeal is dismissed. No order as to costs. 5)In view of the above, we see no reason to entertain the plea of Mr. Dastur, learned Senior Counsel for the appellant assessee that the decision of this Court in Bharat Ruia (HUF) (supra) requires reconsideration. 6)In our view, as the issue is covered by the decision of this Court in Bharat Ruia (HUF) (supra), no substantial question of law arises for consideration. 7)Appeal is dismissed. No order as to costs. 8)At this stage, learned Counsel Mr. Dastur for the appellant-assessee prays for a certificate under Section-261 of the Income Tax Act,1961 that this is a fit case for appeal to the Supreme Court. As the appeal against the decision of this Court in Bharat Ruia (HUF)(supra) is already admitted and numbered as Civil Appeal Nos.4422/2012 and 4423/2012 and we are dismissing the appellant's appeal by following the decision of this Court in Bharat Ruia (HUF) (supra), we grant a certificate that this is a fit case for appeal to the Supreme Court. CHIEF JUSTICE (M.S. SANKLECHA, J.)