CLASSIC SHARES & STOCK BROKING SERVICES LTD, MUMBAI v. CIT CEN IV, MUMBAI

ITA 2829/MUM/2013 | 2001-2002
Pronouncement Date: 23-10-2013 | Result: Allowed

Appeal Details

RSA Number 282919914 RSA 2013
Assessee PAN AABCS4255R
Bench Mumbai
Appeal Number ITA 2829/MUM/2013
Duration Of Justice 6 month(s) 12 day(s)
Appellant CLASSIC SHARES & STOCK BROKING SERVICES LTD, MUMBAI
Respondent CIT CEN IV, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 23-10-2013
Date Of Final Hearing 21-08-2013
Next Hearing Date 21-08-2013
Assessment Year 2001-2002
Appeal Filed On 10-04-2013
Judgment Text
E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI .. !'# $ $ $ $ %&. !.'.. $( ) !'# !* BEFORE SHRI P.M. JAGTAP AM AND DR. S.T.M. PAVALAN JM !./ I.T.A. NO. 2829/MUM/2013 ( )( $- )( $- )( $- )( $- / / / / ASSESSMENT YEAR : 2001-02 CLASSIC SHARES & STOCK BROKING SERVICES LTD. RADHA BHAVAN IST FLOOR 121 NAGINDAS MASTER ROAD MUMBAI 400 023. ( ( ( ( / VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE IV. AAYAKAR BHAVAN M.K. MARG MUMBAI- 20. #. !./ PAN : AABCS4255R ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) APPELLANT BY SHRI RAJEEV KHANDELWAL & SHRI NEEL KHANDELWAL RESPONDENT BY : DR. P. DANIEL !($ 2 / // / DATE OF HEARING : 21-08-2013 34- 2 / DATE OF PRONOUNCEMENT : 23-10-2013 [ '5 / O R D E R PER P.M. JAGTAP A.M . : .. !'# THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT CENTRAL IV MUMBAI DATED 28-03-2013 PASSED U /S 263 OF THE INCOME TAX ACT 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 31-10-20 01 DECLARING LOSS OF RS. 16.82 CRORES. IN THE ASSESSMENT ORIGINALLY COMPLETE D U/S 143(3) OF THE INCOME TAX ACT 1961 VIDE AN ORDER DATED 30-3-2004 THE LO SS OF THE ASSESSEE WAS DETERMINED BY THE A.O. AT RS. 3.13 CRORES. IN THE SAID ASSESSMENT THE ITA 2829/M/13 2 DELIVERY BASED LOSS OF RS. 2.67 CRORES AND NON-DELI VERY BASED LOSS OF RS. 10.95 CRORES WAS DISALLOWED BY THE A.O. ON APPEAL THE L D. CIT (A) UPHELD THE ORDER OF THE A.O. DISALLOWING THE SAID LOSSES. ON FURTHER APPEAL THE TRIBUNAL VIDE ITS ORDER DATED 17-2-2010 RESTORED THE CASE OF THE ASSESSEE TO THE FILE OF THE A.O. WITH THE FOLLOWING DIRECTION:- IN VIEW OF THE FINDING OF THE FACTS IN ANOTHER GROU P CONCERN WE ARE OF THE OPINION THAT THE ASSESSING OFFICER SHOULD EXAMI NE THE NATURE OF THE TRANSACTION UNDERTAKEN BY THE ASSESSEE WITHOUT GETT ING AFFECTED/PERSUADED BY THE OBSERVATIONS OF THE SEBI/ JPC UNLESS THEY ARE APPLICABLE TO THE FACTS IN THE ASSESSEES CASE. IT IS ALSO BROUGHT TO OUR NOTICE THAT THERE WAS SPECIAL AUDIT CONDUCTED O F THE ASSESSEES TRANSACTIONS AND THE REPORT WAS NOT PLACED ON RECOR D. THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE ISSUES AFRESH I N THE LIGHT OF THE FACTS ON RECORD AND NEEDLESS TO SAY THAT THE ASSESSEE SHO ULD BE GIVEN OPPORTUNITY BEFORE DECIDING THE ISSUES. FOR THIS P URPOSE THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) ON THIS ISSUE ARE SET ASIDE AND THE ASSESSMENT IS RESTORED BACK TO THE ASSESSING OFFICE R TO CONSIDER IT AFRESH AFTER EXAMINING THE FACTS AND ACCORDING TO T HE LAW. 3. AS PER THE DIRECTION OF THE TRIBUNAL THE A.O. P ASSED A FRESH ORDER U/S 143(3) R.W.S. 254 OF THE ACT ON 27-12-2010 ALLOWING THE CLAIM OF THE ASSESSEE FOR DELIVERY BASED LOSS OF RS. 2.67 CRORES AND NON- DELIVERY BASED LOSS OF RS. 10.95 CRORES. THE RECORDS OF THIS FRESH ASSESSMENT CAME TO BE EXAMINED BY THE LD. CIT AND ON SUCH EXAMINATION HE WAS OF THE VIEW THAT THE CLAIM OF THE ASSESSEE FOR DELIVERY BASED LOSS AND NON-DELIVERY B ASED LOSS WAS ALLOWED BY THE A.O. WITHOUT MAKING ENQUIRIES WITH REGARD TO TH E NATURE OF THE RELEVANT TRANSACTIONS AND WITHOUT EXAMINING THE RELEVANT FAC TS AND DETAILS OF THE TRANSACTIONS AS DIRECTED BY THE TRIBUNAL. HE THERE FORE EXERCISED THE POWERS CONFERRED UPON HIM U/S 263 OF THE ACT AND ISSUED A NOTICE REQUIRING THE ASSESSEE TO OFFER ITS EXPLANATION AS TO WHY THE ORD ER PASSED BY THE A.O. U/S 143(3) R.W.S. 254 OF THE ACT SHOULD NOT BE SET ASID E. IN REPLY IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE LOSS CLAIMED BY IT WAS GENUINE AND THE A.O. HAD ALLOWED THE SAME AFTER VERIFYING THE RELEVANT D ETAILS. IT WAS CONTENDED THAT THE ORDER PASSED BY THE A.O. THEREFORE WAS N EITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD . CIT DID NOT FIND MERIT IN ITA 2829/M/13 3 THIS CONTENTION OF THE ASSESSEE. ACCORDING TO HIM THE OBSERVATIONS MADE BY THE A.O. IN THE ORIGINAL ASSESSMENT ORDER DATED 30- 3-2004 POINTING OUT THAT THE LOSS INCURRED IN THE DELIVERY BASED AS WELL AS NON-DELIVERY BASED TRANSACTIONS WAS IN THE SAME SHARES WHEREIN THE GRO UP HAD MANIPULATED THE PRICES AS FOUND OUT BY THE SEBI AND JPC WERE SUFFI CIENT TO SHOW THE CRITICAL NATURE OF TRANSACTIONS AND THE A.O. THEREFORE SH OULD HAVE VERIFIED AND EXAMINED ALL THE DETAILS WITH REGARD TO THE PRICES/ RATES OF SCRIPS MORE DEEPLY AND METICULOUSLY. HE OBSERVED THAT THE SAME HOWEV ER WAS NOT DONE BY THE A.O. AND THE CLAIM OF THE ASSESSEE WAS ACCEPTED IN A ROUTINE MANNER. HE ALSO OBSERVED THAT NO ENQUIRY WAS MADE BY THE A.O. TO FI ND OUT THE REASONS FOR LOSSES CLAIMED BY THE ASSESSEE AND ALSO TO FIND OUT WHETHER ANY MANIPULATION WAS ACTUALLY INVOLVED IN THE TRANSACTIONS AS POINTE D OUT BY SEBI AND JPC. ACCORDING TO THE LD. CIT THE A.O. HAD ALSO NOT TAK EN INTO ACCOUNT THE REPORT OF THE SPECIAL AUDIT CONDUCTED IN RESPECT OF ASSESS EES TRANSACTIONS AS DIRECTED BY THE TRIBUNAL. HE THEREFORE HELD THAT THE ORDER U/S 143(3) R.W.S. 254 OF THE ACT WAS PASSED BY THE A.O. IN HASTE WITH OUT MAKING PROPER ENQUIRY AND WITHOUT PROPERLY EXAMINED ALL THE RELEV ANT DETAILS AS PER THE DIRECTIONS OF THE TRIBUNAL. ACCORDINGLY THE SAID O RDER WAS SET ASIDE BY HIM VIDE ITS ORDER PASSED U/S 263 OF THE ACT WITH A DIR ECTION TO THE A.O. TO PASS A FRESH ORDER IN PURSUANCE THE TRIBUNALS DIRECTION GIVEN IN THE ORDER DATED 17-02-2010 AFTER MAKING NECESSARY ENQUIRY AS WARRAN TED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. AGGRIEVED BY THE SAME T HE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET INVITED OUR ATTENTION TO THE DIRECTIONS GIVEN BY THE TRIBUNAL IN ITS ORDER D ATED 17-2-2010 WHILE RESTORING THE ISSUE RELATING TO THE ASSESSEES CLAI M FOR DELIVERY BASED AND NON- DELIVERY BASED LOSSES. HE SUBMITTED THAT THE SAID D IRECTIONS GIVEN BY THE TRIBUNAL WERE SPECIFIC AND IN PURSUANCE THEREOF AL L THE RELEVANT DETAILS AND DOCUMENTS WERE FURNISHED BY THE ASSESSEE BEFORE THE A.O. HE INVITED OUR ITA 2829/M/13 4 ATTENTION TO THE COPY OF LETTER DATED 2 ND NOVEMBER 2010 SUBMITTED TO THE A.O. (COPY PLACED AT PAGE NO. 2 & 3 OF THE PAPER BOOK) U NDER WHICH THE DETAILS AND DOCUMENTS WERE FURNISHED BY THE ASSESSEE. HE CONTEN DED THAT ONLY AFTER VERIFICATION OF ALL THESE DETAILS AND DOCUMENTS TH E CLAIM OF THE ASSESSEE FOR DELIVERY BASED AND NON-DELIVERY BASED LOSS WAS ALLO WED BY THE A.O. HE INVITED OUR ATTENTION TO THE RELEVANT DETAILS OF DELIVERY B ASED AND NON-DELIVERY BASED LOSSES FURNISHED BEFORE THE A.O. PLACED AT PAGE 13 TO 15 OF HIS PAPER BOOK AND POINTED OUT THAT THERE WERE TRANSACTIONS ENTERED IN TO BY THE ASSESSEE ONLY IN FOUR SETTLEMENT PERIOD WHICH RESULTED IN LOSS OF RS . 10.95 CRORES IN THE NON- DELIVERY BASED TRANSACTIONS. 5. THE LEARNED COUNSEL FOR THE ASSESSEE TOOK US THR OUGH THE SETTLEMENT- WISE DETAILS OF THE RELEVANT TRANSACTIONS FURNISHED BEFORE THE A.O. IN RESPECT OF SHARES TRADED THE RELEVANT BANK STATEMENTS AND THE COPIES OF COMPLETE BILLS IN RESPECT OF LOSS ARISING FROM NON-DELIVERY BASED TRANSACTIONS. HE ALSO TOOK US THROUGH THE RELEVANT DETAILS FURNISHED BEFO RE THE A.O. IN SUPPORT OF ASSESSEES CLAIM FOR DELIVERY BASED LOSS OF RS. 2.6 7 CRORES GIVING INTER ALIA SCRIPT-WISE P&L ACCOUNT MARK TO MARKET LOSS COPY OF DEBIT NOTES MARKET QUOTATION OF SHARES ETC. HE THEN INVITED OUR ATTENT ION TO THE ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 254 OF THE ACT TO POINT OUT THAT ALL THESE DETAILS AND DOCUMENTS FURNISHED BY THE ASSESSEE WERE SPECIFICAL LY REFERRED TO BY THE A.O. IN THE SAID ORDER. HE ALSO POINTED OUT FROM THE SAI D ORDER THAT THE COPY OF AUDIT REPORT UNDER THE COMPANIES ACT AND U/S 142(2A ) OF THE INCOME TAX ACT 1961 WAS FURNISHED BY THE ASSESSEE BEFORE THE A.O. HE CONTENDED THAT ALL THESE DETAILS AND DOCUMENTS FURNISHED BY THE ASSESS EE BEFORE THE A.O. WERE SUFFICIENT TO SUPPORT AND SUBSTANTIATE THE CLAIM OF THE ASSESSEE FOR DELIVERY BASED AND NON-DELIVERY BASED LOSS AS PER THE DIRECT IONS OF THE TRIBUNAL AND ONLY AFTER VERIFYING THE SAME THE CLAIM OF THE ASS ESSEE FOR THE SAID LOSS WAS ACCEPTED/ALLOWED BY THE A.O. ITA 2829/M/13 5 6. THE LD. COUNSEL FOR THE ASSESSEE FURTHER POINTED OUT FROM THE DETAILS FURNISHED AT THE PAGE NO. 30 AND 33 OF THE PAPER BO OK FURNISHED BEFORE THE A.O. THAT THE DELIVERY BASED LOSS DID NOT ARISE FRO M ANY TRADING TRANSACTIONS BUT THE SAME WAS MAINLY A RESULT OF MARK TO MARKET VALUATION OF THE RELEVANT SHARES MADE BY THE ASSESSEE. HE SUBMITTED THAT THE SAID VALUATION IN FACT HAD RESULTED IN PROFIT ALSO AT LEAST IN RESPECT OF SHARES OF NAUMI PUBLICATIONS LTD. AND AFTER ADJUSTING THE SAID PROFIT ONLY THE NET LOSS WAS CLAIMED BY THE ASSESSEE. HE ALSO INVITED OUR ATTENTION TO THE RELE VANT PORTION OF THE AUDIT REPORT OBTAINED U/S 142(2A) OF THE ACT PLACED AT PA GE 333 OF HIS PAPER BOOK TO SHOW THAT AFTER CONSIDERING THE COMPUTERIZED BOOKS OF ACCOUNT SOFTWARE DATA AND SEIZED MATERIAL AND DATA SUPPLIED BY THE CONCER NED STOCK EXCHANGE A FAVOURABLE REPORT WAS GIVEN BY THE AUDITORS CERTIFY ING THAT THE P&L ACCOUNT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS G IVEN A TRUE AND FAIR PICTURE. HE POINTED OUT THAT THERE WAS NO QUALIFICA TION OR ADVERSE COMMENTS MADE BY THE AUDITOR RELATING TO THE LOSS CLAIMED BY THE ASSESSEE IN RESPECT OF DELIVERY BASED AND NON-DELIVERY BASED TRANSACTIONS. HE ALSO INVITED OUR ATTENTION TO THE ANNEXURE (II) TO THE SAID REPORT G IVING DETAILS AND DOCUMENTS VERIFIED BY THE AUDITORS. 7. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT ALL THE RELEVANT TRANSACTIONS RESULTING INTO LOSS CLAIMED BY THE ASS ESSEE WERE DONE AT THE PREVAILING RATE AS PER THE STOCK EXCHANGE AND THERE WAS NO REASON FOR THE LD. CIT TO DOUBT THE GENUINENESS OF THE SAID TRANSACTIO NS OR EVEN THE REASONS FOR HEAVY LOSSES SUFFERED BY THE ASSESSEE. HE ALSO SUBM ITTED THAT INDEPENDENT ENQUIRY WAS DIRECTED TO BE MADE BY THE TRIBUNAL TO THE A.O. WITHOUT GETTING INFLUENCED BY THE REPORT OF JPC OR SEBI. HE CONTEND ED THAT THE LD. CIT HOWEVER RELIED IN HIS IMPUGNED ORDER ON THE SAID R EPORT TO ALLEGE MANIPULATION AND ERROR IN THE ORDER OF THE A.O. IN NOT MAKING THE ENQUIRY IN SUCH MANIPULATIONS ALLEGED IN THE JPC OR SEBI REPOR T. HE ALSO INVITED OUR ATTENTION TO THE COPY OF THE TRIBUNALS ORDER PASSE D IN THE CASE OF ANOTHER ITA 2829/M/13 6 GROUP CONCERN VIZ. SAIMANGAL INVESTMENT & TRADE LTD . VS. DCIT (ITA NO. 4229/MUM/2007 DATED 27-4-2009) TO SHOW THAT A SIMIL AR CLAIM OF LOSS IN THE SAID CASE WAS ALLOWED BY THE TRIBUNAL. HE SUBMITTE D THAT THE SAID DECISION OF THE TRIBUNAL CLEARLY SHOWS THAT THE VIEW TAKEN IN T HE CASE OF THE ASSESSEE ON SIMILAR ISSUE AFTER VERIFYING ALL THE RELEVANT DETA ILS AND DOCUMENTS WAS A CORRECT VIEW AND THERE WAS NO ERROR IN THE ORDER OF THE A.O. CALLING FOR ANY REVISION U/S 262 OF THE ACT. 8. THE LD. D.R. ON THE OTHER HAND STRONGLY SUPPOR TED THE IMPUGNED ORDER OF THE LD. CIT PASSED U/S 263 OF THE ACT. HE SUBMIT TED THAT NO ENQUIRY WHATSOEVER WAS MADE BY THE A.O. WITH THE THIRD PART IES TO VERIFY THE GENUINENESS OF ASSESSEES CLAIM FOR LOSS BEFORE ALL OWING THE SAME. HE ALSO SUBMITTED THAT NO FURTHER DETAILS WERE CALLED FOR B Y THE A.O. WHICH CLEARLY SHOWS THAT THERE WAS NO APPLICATION OF MIND BY HIM. HE CONTENDED THAT EVEN THE ORDER PASSED BY THE A.O. WAS CRYPTIC WHEREIN TH ERE WAS NO DISCUSSION ON THE ISSUE RAISED INTO RELATING TO THE ASSESSEES CL AIM FOR LOSS. HE CONTENDED THAT THE ORDER PASSED BY THE A.O. THUS WAS ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE SAME WAS RIGHTLY SE T ASIDE BY THE LD. CIT EXERCISING THE POWERS CONFERRED UPON HIM U/S 263 OF THE ACT WITH A DIRECTION TO THE A.O. TO MAKE THE SAME AFRESH AS PER THE DIRE CTION GIVEN BY THE TRIBUNAL. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT T HE ISSUE RELATING TO THE ASSESSEES CLAIM FOR DELIVERY BASED LOSS AND NON-DE LIVERY BASED LOSS WAS RESTORED BY THE TRIBUNAL TO THE FILE OF THE A.O. WI TH A DIRECTION TO DECIDE THE SAME AFRESH AFTER EXAMINING THE NATURE OF RELEVANT TRANSACTIONS UNDERTAKEN BY THE ASSESSEE AND WITHOUT GETTING AFFECTED OR PER SUADED BY THE OBSERVATIONS OF THE SEBI AND JPC UNLESS THEY ARE FOUND TO BE APP LICABLE TO THE FACTS OF THE ASSESSEES CASE. THE TRIBUNAL ALSO TOOK NOTE OF TH E FACT THAT THE SPECIAL AUDIT WAS CONDUCTED OF THE ASSESSEES TRANSACTIONS AND TH E REPORT THEREOF WAS NOT ITA 2829/M/13 7 PLACED ON RECORD. IN PURSUANCE OF THE DIRECTION OF THE TRIBUNAL GIVEN VIDE ITS ORDER DATED 17-02-2010 THE MATTER WAS TAKEN UP BY THE A.O. FOR FRESH CONSIDERATION AND DURING THE COURSE OF SET ASIDE PR OCEEDINGS A LETTER DATED 2-11-2010 WAS SUBMITTED BY THE ASSESSEE TO THE A.O. FURNISHING THE FOLLOWING DETAILS AND DOCUMENTS IN SUPPORT OF ITS CLAIM FOR N ON-DELIVERY BASED LOSS AND DELIVERY BASED LOSS:- SR NO. DESCRIPTION PAGES NOS 1 SUPPORTING FOR NON-DELIVERY LOSS RS. 10 95 62 134 (I) SPECULATION LEDGER 14-15 (II) (A) SETTLEMENT NO. N2001008 FOR LOSS OF RS. 8 43 80 320.60 VALLAN SUMMARY DETAILS OF SHARES TRADED AND BANK STATEMENT 102-104 (B) SETTLEMENT NO. 2001009 FOR LOSS OF RS. 93 58 254.55 VALLAN SUMMARY DETAILS OF SHARES TRADED AND BANK STATEMENT 105-107 (C) SETTLEMENT NO. N2001010 FOR LOSS OF RS. 3 98 00 018.50 VALLAN SUMMARY DETAILS OF SHARES TRADED AND BANK STATEMENT 108-110 (D) SETTLEMENT NO. N2001011 FOR LOSS OF RS. 1 10 47 309.50 VALLAN SUMMARY DETAILS OF SHARES TRADED AND BANK STATEMENT 111-113 (E) COPY OF COMPLETE BILL FOR SETTLEMENT NO. 2001008 119-247 2 SUPPORTING FOR DELIVERY LOSS RS. 2 67 62 566/- (A) DETAILS OF INCOME FROM OPERATIONS 12 (B) SCRIPWISE PROFIT AND LOSS 13 51 (C) MARK TO MARKET LOSS 59-60 (D) COPY OF DEBIT NOTES AND MARKET QUOTATION FOR PURCHASE OF SHARES 61-70 (E) QUOTATION FOR MARKET RATE AS ON 31 ST MARCH 2001 71-75 10. THE COPIES OF ALL THE ABOVE DOCUMENTS FILED BEF ORE THE A.O. DURING THE COURSE OF SET ASIDE PROCEEDINGS ARE PLACED ON RECOR D BEFORE US IN THE PAPER BOOK FILED BY THE ASSESSEE AND THE LD. COUNSEL FOR THE ASSESSEE HAS TAKEN US THROUGH ALL THESE DETAILS AND DOCUMENTS FURNISHED B Y THE ASSESSEE TO SHOW THAT THE SAME WERE SUFFICIENT TO SUPPORT AND SUBSTA NTIATE THE CLAIM OF THE ASSESSEE FOR DELIVERY BASED LOSS AND NON-DELIVERY B ASED LOSS. AS EXPLAINED BY ITA 2829/M/13 8 HIM FROM THE RELEVANT DETAILS AVAILABLE AT PAGE 13 & 51 OF THE PAPER BOOK THE DELIVERY BASED LOSS WAS INCURRED MAINLY AS A RESULT OF MARK TO MARKET VALUATION OF THE SHARES MADE BY THE ASSESSEE AND SI NCE THE PURCHASE PRICE OF THE RELEVANT SHARES AS WELL AS VALUATION THEREOF AS ON 31-3-2001 WAS TAKEN AT THE PREVAILING MARKET RATES AS PER THE STOCK EXCHAN GE WE FIND THAT THE DETAILS FURNISHED BY THE ASSESSEE BEFORE THE A.O. WERE SUFF ICIENT TO SUPPORT AND SUBSTANTIATE ITS CLAIM FOR DELIVERY BASED LOSS. IN FACT THE DETAILS OF THE SAID LOSS AVAILABLE AT PAGE 51 OF THE PAPER BOOK SHOW TH AT THERE WERE ONLY TWO TRANSACTIONS OF SALE OF SHARES OUT OF WHICH ONE TRA NSACTION RESULTED IN A PROFIT OF RS. 49 20 000/- AND AFTER ADJUSTING THE SAID PRO FIT ONLY NET LOSS WAS CLAIMED BY THE ASSESSEE. 11. AS REGARDS THE NON-DELIVERY BASED LOSS THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE DETAILS OF SPECULA TIVE TRANSACTION OF THE ASSESSEE PLACED AT PAGE 14 TO 15 OF THE PAPER BOOK WHICH SHOW THAT THE LOSS WAS INCURRED DURING FOUR SETTLEMENT PERIODS ONLY AN D ALL THE RELEVANT DETAILS IN RESPECT OF THESE FOUR SETTLEMENT PERIODS WERE FU RNISHED BY THE ASSESSEE BEFORE THE A.O. GIVING VALLAN SUMMARY DETAILS OF S HARES TRADED AND THE RELEVANT BANK STATEMENTS WHEREIN THESE TRANSACTIONS WERE REFLECTED. EVEN THE COPIES OF COMPLETE BILLS WERE FURNISHED BY THE ASSE SSEE BEFORE THE A.O. IN OUR OPINION ALL THESE DETAILS AND DOCUMENTS FURNISHED BY THE ASSESSEE WERE SUFFICIENT TO PROVE THE EXACT NATURE OF THE TRANSAC TION ENTERED INTO BY THE ASSESSEE RESULTING IN DELIVERY BASED AND NON-DELIVE RY BASED LOSSES AND THE SAME WERE SUFFICIENT TO SUPPORT AND SUBSTANTIATE TH E CLAIM OF THE ASSESSEE FOR THE SAID LOSS IN PURSUANCE TO THE DIRECTION OF THE TRIBUNAL. AS A MATTER OF FACT A SPECIFIC REFERENCE WAS MADE BY THE A.O. IN HIS ORDER PASSED U/S 143(3) R.W.S. 254 OF THE ACT TO ALL THESE DETAILS AND DOCU MENTS FURNISHED BY THE ASSESSEE IN PARA 3 AND IT WAS ALSO CLEARLY MENTIONE D THAT THE AUDIT REPORT UNDER THE COMPANIES ACT AS WELL AS THE ONE OBTAINE D U/S 142(2A) OF THE ACT WAS SUBMITTED BY THE ASSESSEE. ITA 2829/M/13 9 12. IT IS PERTINENT TO NOTE HERE THAT IN ITS ORDER DATED 17-2-2010 IT WAS NOTED BY THE TRIBUNAL THAT SPECIAL AUDIT OF THE ASS ESSEES TRANSACTIONS WAS CONDUCTED BUT THE REPORT THEREOF WAS NOT PLACED ON RECORD. THE ASSESSEE THEREFORE FILED A COPY OF THE SAID AUDIT REPORT BEF ORE THE A.O. WHICH AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE DI D NOT BEAR ANY ADVERSE COMMENT OR QUALIFICATION ON THE TRANSACTIONS OF THE ASSESSEE RESULTING IN DELIVERY BASED AND NON-DELIVERY BASED LOSS. ON THE OTHER HAND IT WAS CERTIFIED IN THE SAID REPORT THAT THE P&L ACCOUNT O F THE ASSESSEE COMPANY FOR THE YEAR UNDER CONSIDERATION GAVE A TRUE AND FAIR V IEW OF THE LOSS INCURRED BY IT AND THIS REPORT WAS GIVEN BY THE AUDITORS AFTER TAKING INTO CONSIDERATION THE COMPUTERIZED BOOKS OF ACCOUNT SOFTWARE DATA SEIZE D MATERIAL AND DATA SUPPLIED BY THE CONCERNED STOCK EXCHANGE. WE THERE FORE FIND THAT ALL THE DETAILS AND DOCUMENTS REQUIRED BY THE A.O. TO EXAMI NE/VERIFY ITS CLAIM FOR DELIVERY BASED LOSS AND NON-DELIVERY BASED LOSS AS PER THE DIRECTION OF THE TRIBUNAL WERE FURNISHED BY THE ASSESSEE AND AFTER V ERIFYING THE SAME THE CLAIM OF THE ASSESSEE FOR THE SAID LOSS WAS ALLOWED BY THE A.O. 13. IT IS TRUE THAT ALTHOUGH THE A.O. HAS MADE SPEC IFIC REFERENCE TO ALL THE DETAILS AND DOCUMENTS FURNISHED BY THE ASSESSEE IN HIS ORDER THERE IS NO ELABORATE DISCUSSION MADE BY HIM ON THIS ISSUE. HE HOWEVER HAS SPECIFICALLY MENTIONED IN PARA 4 THAT THE DETAILS AND DOCUMENTS FURNISHED BY THE ASSESSEE WERE DULY EXPLAINED AND ONLY AFTER VERIFYI NG AND DISCUSSING THE SAME WITH THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THE ASSESSEE WAS HELD TO BE ENTITLED TO LOSS ON DELIVERY BASED AND NON-DELIV ERY BASED TRANSACTIONS BY THE A.O. IN OUR OPINION THIS CLEARLY SHOWS THAT A CATEGORIC AND DEFINITE CONCLUSION WAS ARRIVED AT BY THE A.O. ON THIS ISSUE AFTER DISCUSSING AND VERIFYING ALL THE RELEVANT DETAILS FURNISHED BY THE ASSESSEE SHOWING APPLICATION OF MIND. IT IS THUS NOT A CASE WHERE TH E CLAIM OF THE ASSESSEE WAS ACCEPTED BY THE A.O. IN ROUTINE MANNER WITHOUT VERI FYING THE RELEVANT DETAILS ITA 2829/M/13 10 AS ALLEGED BY THE LD. CIT IN HIS IMPUGNED ORDER. I T WAS ALSO NOT A CASE WHERE THE REPORT OF THE SPECIAL AUDIT WAS NOT TAKEN INTO ACCOUNT BY THE A.O. AS ALLEGED BY THE LD. CIT. AS A MATTER OF FACT THE SA ID REPORT WAS IN FAVOUR OF THE ASSESSEE INASMUCH AS THERE WAS NO ADVERSE COMMENT O R QUALIFICATION MADE BY THE AUDITORS IN THE SAID REPORT ON THE TRANSACTI ONS ENTERED INTO BY THE ASSESSEE RESULTING IN THE IMPUGNED LOSSES AND THE P ROFIT AND LOSS OF THE ASSESSEE WAS CERTIFIED AS GIVING TRUE AND FAIR VIEW OF THE LOSS OF THE ASSESSEE. IN THE CASE OF ANIL SHAH VS. ACIT 162 TAXMAN 39 (M UM) THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS HELD THAT IF THE A.O. AL LOWED THE CLAIM ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE ON E NQUIRY MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE DECISION OF T HE A.O. CANNOT BE HELD TO BE ERRONEOUS ON THE GROUND THAT THERE IS NO ELABORA TE DISCUSSION IN THAT REGARD IN HIS ORDER. AS REGARDS THE REFERENCE MADE BY THE LD. CIT IN HIS IMPUGNED ORDER TO THE REPORT OF SEBI AND JPC IT IS OBSERVED THAT WHILE RESTORING THE ISSUE TO THE FILE OF THE A.O. WITH A DIRECTION TO EXAMINE THE NATURE OF THE TRANSACTIONS UNDERTAKEN BY THE ASSESS EE THE A.O. WAS SPECIFICALLY CAUTIONED BY THE TRIBUNAL NOT TO GET A FFECTED/PERSUADED BY THE OBSERVATIONS OF THE SEBI AND JPC UNLESS THEY ARE F OUND APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IN HIS IMPUGNED ORDE R THE LD. CIT HAS NOT GIVEN ANY BASIS WHATSOEVER TO SHOW THAT ANY OF THE OBSERV ATIONS OF THE SEBI OR JPC WAS FOUND TO BE APPLICABLE BY HIM TO THE FACTS OF T HE ASSESSEES CASE. AS SUCH CONSIDERING ALL THE FACTS OF THE CASE WE ARE OF TH E VIEW THAT THERE WAS NO ERROR IN THE ORDER OF THE A.O. PASSED U/S 143(3) R.W.S. 2 54 OF THE ACT AS ALLEGED BY THE LD. CIT WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THERE WAS NO JUSTIFICATION ON THE PART OF THE LD. CIT TO SET ASIDE THE SAME BY EXERCISING THE POWERS CONFERRED UPON HIM U/S 263 OF THE ACT. A CCORDINGLY THE IMPUGNED ORDER PASSED BY THE LD. CIT U/S 263 OF THE ACT IS S ET ASIDE AND THAT OF THE A.O. PASSED U/S 143(3) R.W.S. 254 OF THE ACT IS RESTORED . ITA 2829/M/13 11 14. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER 2013 . '5 2 34- 6'(7 23-10-2013 4 2 SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) ) !'# JUDICIAL MEMBER !'# / ACCOUNTANT MEMBER MUMBAI ; 6'( DATED 23-10-2013 $.)(.!./ RK SR. PS '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9-/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. ; () / THE CIT CENTRAL- IV MUMBAI. 4. ; / DCIT CENTRAL RG. 40 MUMBAI 5. 9$> 0))( / DR ITAT MUMBAI E BENCH 6. % ? / GUARD FILE. '5(! '5(! '5(! '5(! / BY ORDER !19 0) //TRUE COPY// @ @ @ @/ // /!A !A !A !A ( DY./ASSTT. REGISTRAR) / ITAT MUMBAI