Itxa/734/2013 Of The Commissioner Of Income Tax - Iv v. Thermax Capital Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1094 OF 2012 The Commissioner of Income Tax - IV..Appellant.V/s.Thermax Capital Limited..Respondent. Mr. Tejveer Singh, for the Appellant.Mr. Sanjiv Shah, for the Respondent. P.C:- CORAM: J.P.DEVADHAR & M.S.SANKLECHA,JJ.DATE : 11[th] JANUARY, 2013. In this Appeal by the Revenue, the following questions of law have been raised for consideration of this Court. “Whether on the facts and under the circumstances of the case and in the law, the ITAT was justified in setting aside the order passed by the CIT u/s. 263 despite the fact that- (i)The ITAT held that the Assessing Officer did not apply his mind on the issue. (ii)There was a clear finding by the CIT that the purchase and sale transaction of Mutual Fund Units gave rise to Capital Loss as the assessee itself has shown them as investments.” 2The Respondent-Assessee is engaged in the business of Leasing, Hire Purchase, Bill Discounting, Inter Corporate Deposit (ICD) and various other related investments. One such investment includes investment in units of Mutual Funds of SBI. In the Assessment Year 2001-2002, an order was passed by the Assessing Officer on 26[th] December, 2006 under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the said Act”), determining the Respondent/Assessee's loss at Rs.2.88 Crores. Thereafter, under Section 263 of the said Act, assessment was reviewed by the CIT on the ground that the units of SBI Mutual Funds were held for a period of approximately 12 months, could not be considered as stock-in-trade for investment but investment for capital gain. In view thereof, the CIT by his order dated 25[th] February, 2009, held that the Assessment Year was erroneous and caused prejudice to the interest of the revenue. In the circumstances, the CIT directed the Assessing Officer to pass a fresh order of assessment. 3In appeal, the tribunal has rendered a finding of fact that the investments of the Respondent/Assessee are classified as non-trading investment under the head “Long Terms Investment” while trading investments were classified as “Other Trading Oriented Current Investments.” The Tribunal held that CIT has not distinguished this S.R.JOSHI2 of 3 2 of 3 aspect of the non-trading and trading investment maintained by Respondent/Assessee while passing an order under Section 263 of the said Act. It is also not the case of the CIT that similar investments were not treated as “current investment's” i.e. stock-in-trade. Further the Tribunal held that the CIT has not stated in the order that the Assessee had deviated in maintaining the principle of consistency in the matters of accounting of similar transaction. Thus the exercise of jurisdiction to the Section 263 of the Act was not warranted. 4We find that the view taken by the Tribunal in setting aside the order of the CIT under Section 263 of the Act is well reasoned and does not raise a question, warranting our consideration. 5Accordingly, appeal is dismissed with no order as to costs. (M.S.SANKLECHA,J.) (J.P.DEVADHAR,J.)