Itxa/4008/2009 Of The Commissioner Of Income Tax-9 Mumbi v. M/S. Ranjit Holding P Ltd

1 itxa4008-09 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.4008 OF 2009 The Commissioner of Income Tax-9 ..Appellant. V/s. M/s. Ranjit Holdings P.Ltd. ..Respondent. Mr. Vimal Gupta with Ms. Padma Divakar for appellant. Mr. F.V. Irani i/b. Atul K. Jasani for respondent. P.C. :- CORAM : J.P. DEVADHAR AND SMT. R.S. DALVI, JJ.DATED : 14TH MARCH, 2011 1.Heard. Admit on the following questions of law, which read as under:- a)Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the gross total income of the assessee mainly consisted of income chargeable under the head 'capital gains' and therefore the assessee cannot be considered to be carrying on a speculation business in respect of purchase and sale of shares as its case would fall squarely within the exception mentioned in Explanation to Section 73 of the Act, ignoring the fact that the main business was of purchase and sale of shares and the business loss during the year under consideration including unabsorbed loss amounted to Rs.5.53 crores which was more than the loss under the head 'capital gains' ?Tribunal was correct in law in holding that the gross total income of the assessee mainly consisted of income chargeable under the head 'capital gains' and therefore the assessee cannot be considered to be carrying on a speculation business in respect of purchase and sale of shares as its case would fall squarely within the exception mentioned in Explanation to Section 73 of the Act, ignoring the fact that the main business was of purchase and sale of shares and the business loss during the year under consideration including unabsorbed loss amounted to Rs.5.53 crores which was more than the loss under the head 'capital gains' ? b)Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the disallowances made by the assessing officer on account of Long Term Capital Loss of Rs.97.62 lac which was claimed by the assessee through dubious method with intention to claim artificial loss ? Tribunal was justified in law in deleting the disallowances made by the assessing officer on account of Long Term Capital Loss of Rs.97.62 lac which was claimed by the assessee through dubious method with intention to claim artificial loss ? 3.Counsel for the revenue states that the first question is covered against the revenue by the decision of this Court in the case of The Commissioner of Income Tax V/s. M/s. Hero Textiles & Trading Ltd. [Income Tax Appeal No.296 of 2001] decided on 29th January, 2008. Thus, the first question cannot be entertained. 4.As regards the second question is concerned, the relevant facts are that in the year 1996-97 the assessee had purchased 1,50,000 shares of Welspun India Ltd. (pref. shares) for Rs.1.50 crores. The said shares were sold in the assessment year in question 1999-2000 for Rs.75 lakhs thereby incurring loss of Rs.75 lakhs. According to the revenue, the genuineness of the transaction has not been proved in the present case, therefore, the loss could not be allowed as business loss. 5.The Tribunal has held that the transactions were genuine as the shares were purchased and sold to persons who were not related to the assessee and that the shares were sold with a view to discharge the loan liability of the assessee. There is no material on record to suggest that the transaction was not a bonafide transaction. In these circumstances, the decision of the Tribunal in holding that the transaction was genuine is a finding of fact. No question of law arises from the order of the Tribunal. Hence the appeal is dismissed with no order as to costs. (SMT. R.S. DALVI, J.) (J.P. DEVADHAR, J.)