The Director Of Income Tax(International Taxation v. Bank Of America Nt And Sa

kps IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.175 OF 2012 The Director of Income Tax(International Taxation)...Appellant -Versus- Bank of America NT and SA...Respondent ........... Mr.Arvind Pinto a/w Mr.Suresh Kumar and Ms.Padma Divakar, for the Appellant.Mr.P.J.Pardiwalla, Senior Advocate with Ms.Vasanti B. Patel, for the Respondent. ...........CORAM: S.C. DHARMADHIKARIAND B.P. COLABAWALLA, JJ. DATE :- 03[rd] July, 2014 P.C.: 1 This Appeal is directed against the order of the Income Tax Appellate Tribunal dated 27.04.2011. The substantial questions of law are formulated at page 5 of the memo of appeal. 2Insofar as the claim and which is stated to be not covered, according to Mr.Pinto, by the order in the companion appeals, pertains to the loss incurred in respect of the securities particularly disallowance on short sale of securities. What has been brought on record before the Tribunal is that the Bank receipts were treated as valid instruments and the Assessee has dealt in them. Therefore, the Assessee cannot be said to have indulged in short sale. The shares which were sold by the Assessee were eventually purchased. On closer scrutiny the Commissioner of Income Tax (Appeals) and the Tribunal both found that what the Assessee has done was that the sale was effected immediately or within a short time the shares were repurchased. The purchase was resulting in profit. That was added inasmuch as the price at which they were purchased were added to the profit and the entire income was offered to tax by the Assessee. There was no loss and that is the reason given. We do not find that these questions projected as substantial questions of law, namely, questions (a) and (b) can be said to be substantial questions of law. 3Insofar as the question (c) is concerned the Tribunal has rendered a finding of fact in paragraphs 77 to 80 that the Assessee has established that it had not dealt with the parties which were brokers. In fact they were non banking financial companies. In these circumstances there was no violation or breach of the provisions of the Securities Contract Regulation Act, 1956. That being the finding of fact even on this count we do not feel that the Appeal can be admitted. This finding does not give rise to any substantial question of law. 4Even the question with regard to addition of higher purchase price, the Tribunal has rendered a finding of fact and by pointing out that the ready forward transaction and spot transaction have inherent difference. In that, the first leg of ready forward transaction and the second leg have to confirm the market rates. In that regard they pointed out that the rates of ready forward transaction cannot be compared to spot transaction. The subject shares were acquired in spot transaction. The basis of addition, therefore, was erroneous. This is also a finding of fact and rendered in paragraphs 90 and 91 of the order under challenge. We do not find that the same gives rise to any substantial question of law. Therefore, additional points and questions also cannot be termed as substantial questions of law. In addition to the reasons assigned while dismissing the Income Tax Appeal No.177/2012 for the reasons indicated in this order, this Appeal fails and is dismissed. No costs. (B.P. COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.)