ASHOK R RUIA( HUF), MUMBAI v. ITO WD 18(2)(4), MUMBAI

ITA 3658/MUM/2012 | 2005-2006
Pronouncement Date: 26-07-2013 | Result: Dismissed

Appeal Details

RSA Number 365819914 RSA 2012
Assessee PAN AABCA1436E
Bench Mumbai
Appeal Number ITA 3658/MUM/2012
Duration Of Justice 1 year(s) 2 month(s) 3 day(s)
Appellant ASHOK R RUIA( HUF), MUMBAI
Respondent ITO WD 18(2)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 26-07-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 26-07-2013
Date Of Final Hearing 02-07-2013
Next Hearing Date 02-07-2013
Assessment Year 2005-2006
Appeal Filed On 23-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI VIVEK VARMA JUDICIAL MEMBER ITA NO. 6936 6937 & 6938/MUM/2011 (ASSESSMENT YEARS 2003-04 2004-05 & 2005-06.) M/S. ASHOK APPAREL S PVT. LTD. PML PREMISES 462 SENAPATI BAPAT MARG LOWER PAREL MUMBAI 400 0213. PAN: AABCA 1436E VS. THE DCIT CENTRAL CIRCLE - 47. MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.6939 & 6940/MUM/2011 ( ASSESSMENT YEARS 2004-05 & 2005-06.) SMT. AM L A ASHOK RUIA 19 RUIA HOUSE BHAUSAHEB MARG MALABAAR HILLS MUMBAI - 400 006 PAN:ABVPR 7369D VS. THE DCIT CENTRAL CIRCLE - 47. MUMBAI. (APPELLANT) (R ESPONDENT) ITA NO.6941 6942& 6943/MUM/2011 ( ASSESSMENT YEARS 2002-03 2003-04 & 2005-06 .) SHRI ASHOK KUMAR R. RUIA 19 RUIA HOUSE BHAUSAHEB MARG MALABAAR HILLS MUMBAI - 400 006 PAN:AAJPR 8275M VS. THE DCIT CENTRAL CIRCLE - 47. MUMBAI. (APPE LLANT) (RESPONDENT) ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 2 ITA NO.6944/MUM/2011 (A.Y. 2005-06) ITA NO.3658/MUM/2012 (A.Y.2005-06) SHRI ASHOK R. RUIA (HUF) PHOENIX MILLS PREMISES 462 SENAPATI BAPAT MARG LOWER PAREL MUMBAI 400 0213. PAN: AACHA 6159A VS. THE DCIT CENTRAL CIRCLE - 47/ ITO WARD 18(2). MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY MEHTA REVENUE BY : SHRI SURINDER JIT SINGH DATE OF HEARING : 0 2/07/2013 DATE OF PRONOUNCEMENT : 26 / 07/2013 O R D E R PER BENCH: THESE TEN APPEALS ARE ON THE SAME ISSUE AND ASSESS EES HAVE RAISED COMMON GROUNDS IN ALL THESE APPEALS. HOWEVER THE PROCEEDINGS ARE DIFFERENT AND THE RESPECTIVE DETAILS ARE AS UNDER: SR.NO NAME OF THE ASSESSEE A.Y. ITA NO. ASSESSMENT MADE U/S. 1. ASHOK KUMAR R. RUIA (HUF) 2005 - 06 3658/M/12 143(3) 2. ASHOK KUMAR R. RUIA (HUF) 2005 - 06 6944/M/11 143(3) RWS 153C 3. ASHOK KUMAR R. RUIA 2002 - 03 6941/M/11 143(3) RWS 153A 4. AS HOK KUMAR R. RUIA 2003 - 04 6942/M/11 143(3) RWS 153A ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 3 5. ASHOK KUMAR R. RUIA 2005 - 06 6943/M/11 143(3) RWS 153A 6. MRS. AMLA ASHOK RUIA 2004 - 05 6939/M/11 143(3) RWS 153A 7. MRS. AMLA ASHOK RUIA 2005 - 06 6940/M/11 143(3) RWS 153A 8. ASHOK APPARELS P. LTD. 2003 - 04 6936/M/11 143(3) RWS 153A 9. ASHOK APPARELS P. LTD. 2004 - 05 6937/M/11 143(3) RWS 153A 10 ASHOK APPARELS P. LTD. 2005 - 06 6938/M/11 143(3) RWS 153A SINCE COMMON ISSUES ARE INVOLVED THESE ARE HEARD T OGETHER AND DECIDED BY THIS COMMON ORDER. WE HAVE HEARD LD. COUNSEL FOR TH E ASSESSEE SHRI VIJAY MEHTA AND LD. CIT DR SHRI SURINDER JIT SINGH AND T HEIR ARGUMENTS ARE REFERRED WHEREVER NECESSARY. 2. FOR THE SAKE OF RECORD APPEAL IN ASHOK KUMAR RUIA(HUF) IN APPEAL ITA NO.3658/M/2012 FOR ASSESSMENT YEAR 2005-06 WAS TAKEN UP FOR CONSIDERATION FIRST. THE ASSESSEE RAISED THE FOLL OWING GROUNDS: GROUND NO. 1: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE HONBLE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFI RMING THE ACTION OF THE ASSESSING OFFICER IN DETERMINING THE DERIVATIVE LOSS OF RS. 23 25 819 AS LOSS FROM SPECULATIVE BUSINESS. THE APPELLANT PR AYS THAT THE LOSS ON ACCOUNT OF DERIVATIVE TRADING BE CONSIDERED AS BUSI NESS LOSS AS CLAIMED BY THE APPELLANT. THE APPELLANT PRAYS THAT THE SAID TREATMENT OF BUSINESS LOSS AS SPECULATIVE LOSS MAY KINDLY BE ORDERED TO B E DELETED. GROUND NO. 2: ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 4 WITHOUT PREJUDICE TO THE GROUND NO. 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONBLE C OMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT CONSIDERING THE A PPELLANTS CONTENTION OF SET OFF THE LOSS TREATED AS SPECULATION FOR THE CAP TIONED YEAR AGAINST THE INCOME FROM THE SAME ACTIVITY IN THE SUCCEEDING YEA R(S). THE APPELLANT PRAYS THAT THE UNABSORBED LOSSES FROM DERIVATIVE AC TIVITY MAY KINDLY BE ALLOWED TO BE SET OFF AGAINST THE INCOMES FROM THE SAME ACTIVITY IN THE FUTURE YEARS. 3. BRIEFLY STATED THE ASSESSEE IS ENGAGED IN TRAD ING IN SHARES FUTURES AND OPTIONS AND MAKING INVESTMENTS. THE ASSESSEE HAS FI LED RETURN OF INCOME DECLARING TOTAL INCOME AT RS.2 25 303/-. THE ASSESS MENT U/S.143(3) OF THE ACT WAS COMPLETED DETERMINING THE TOTAL INCOME AT RS.67 25 300/- BY TREATING THE INCOME BY WAY OF LICENSE FEES OF RS.65 00 000/- AS TAXABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF UNDER THE H EAD PROFITS AND GAINS FROM BUSINESS OR PROFESSION AS CLAIMED BY THE ASSE SSEE AND TREATING THE LOSS FROM TRADING OF DERIVES OF RS.79 90 860/- AS SPECUL ATION LOSS INSTEAD OF BUSINESS LOSS AS CLAIMED BY THE ASSESSEE. ON THE ISSUE OF TREATMENT OF INCOME CIT(A) DIRECTED TO BE TREATED AS INCOME F ROM OTHER SOURCES ON WHICH THERE IS NO GRIEVANCE. THE ISSUE CONTESTED IS ON T REATING LOSS AS SPECULATIVE LOSS. IT IS STATED IN THE ASSESSMENT ORDER THAT TH E ASSESSEE HAS SHOWN NET LOSS OF RS.23 25 819/- ON DERIVATIVES AND RS.1 70 2 5 880/- ON SHARE TRADING UNDER THE HEAD PROFITS & GAINS FROM BUSINESS OR PR OFESSION. ACCORDING TO THE A.O THESE TRANSACTIONS APPEAR TO BE OF SPECULATIVE IN NATURE AND DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO E XPLAIN AS TO WHY THE LOSS ON DERIVATIVES AND TRADING IN SHARES CLAIMED IN TH E PROFIT & LOSS ACCOUNT SHOULD NOT BE DEEMED TO BE SPECULATIVE TRANSACTIONS U/S.43(5) OF THE ACT. THE ASSESSEE SUBMITTED THAT THE SAME CANNOT BE TREATED AS SPECULATIVE TRANSACTIONS IN VIEW OF THE DECISION OF HONBLE CAL CUTTA HIGH COURT IN THE CASE OF NIRMAL TRADING CO. (82 ITR 782) AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF B.C. SREENIVASA SHETTY (128 ITR 294) & SUNIL SIDDHARTHBHAIS (156 ITR 509). A.O DID NOT AGREE WITH THE CONTENTIO NS OF THE ASSESSEE ON THE GROUND THAT THE SAID TRANSACTIONS HAVE NOT BEEN REF LECTED IN THE DEMAT ACCOUNT OF THE ASSESSEE ASSESSED THE SAME AS SPECU LATIVE TRANSACTIONS AND ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 5 ARRIVED AT A SPECULATION LOSS OF RS.79 90 860/- WHI CH WAS ALLOWED TO BE CARRY FORWARD TO SUBSEQUENT ASSESSMENT YEARS. LD. CIT(A) RELYING ON HIS ORDER FOR THE SAME ASSESSMENT YEAR UNDER SECTION 143(3) R.W.S . 153C UPHELD THE SAME AS HONBLE BOMBAY HIGH COURT IN THE CASE OF SRI B HARAT RUIA ANOTHER MEMBER OF FAMILY HELD AGAINST THE ASSESSEE. ASSES SEE IS AGGRIEVED. 4. IT WAS FAIRLY ADMITTED BY THE LD. COUNSEL FOR TH E ASSESSEE THE ISSUE IN GROUND NO.1 IS AGAINST THE ASSESSEE BY THE ORDER OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BHARAT RUIA IN ITA NO.1539 OF 2010 WHEREIN IT WAS HELD THAT THE LOSSES ARISING ON DERIVATIVE TRANSACTIONS ARE SPECULATIVE IN NATURE AND TO BE ASSESSED ACCORDINGLY. IT WAS FURTHER HEL D THAT THE PROVISO (D) TO SECTION 43(5) INSERTED BY THE FINANCE ACT 2005 IS APPLICABLE FOR ASSESSMENT YEAR 2006-07 AND SUBSEQUENT ASSESSMENT YEARS AND TH E SAID AMENDMENT HAS NO RETROSPECTIVE APPLICATION. 5. CONSIDERING THE LEGAL PRINCIPLES ON THE ISSUES AS PRONOUNCED BY THE HONBLE HIGH COURT IN THE ABOVE REFERRED CASE AS THE FACTS ARE SAME WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). ACCORDINGLY GROUND NO.1 IS REJECTED. 6. AS REGARDS THE GROUND NO.2 THE ISSUE OF SET OFF WILL ARISE IN THE YEAR OF SET OFF. THE LD. CIT(A) HAS HELD AS UNDER: 7.0 I HAVE CAREFULLY EXAMINED THE ALTERNATIVE CON TENTION OF THE APPELLANT SEEKING A DIRECTION TO THE A. 0 FOR ALLOW ING THE SET OFF OF SPECULATIVE LOSS FROM DERIVATIVES TRADING OF THE YE AR OF APPEAL AGAINST THE PROFITS REPORTED FROM THE SAME BUSINESS ACTIVITY I .E. DERIVATIVES TRADING. THE ISSUE OF ELIGIBILITY OF SET OFF OF LOSSES OF AN EARLIER ASSESSMENT YEAR AGAINST THE INCOME FROM A PARTICULAR SOURCE OR UNDE R A SPECIFIC HEAD OF INCOME OF SUBSEQUENT YEAR HAS TO BE EXAMINED AND DE TERMINED ONLY IN THE YEAR OF SET OFF AND NOT IN THE YEAR IN WHICH TH E LOSS IS DETERMINED AND MERELY ALLOWED TO BE CARRIED FORWARD. THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MANMOHAN DAS (1966) (059 ITR 0699) SUPPORTS SUCH A VIEW. AS HELD BY THE HONBLE SUPREME COURT (SUPRA) A. 0 HAS TO TAKE A DECISION ON THE ISSUE O F SET OFF OF CARRY FORWARD OF LOSSES IN THE YEARS OF SET OFF. THEREFORE I DO NOT FIND ANY MERIT IN THE ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 6 ALTERNATIVE CONTENTION OF THE APPELLANT THIS GROUND OF APPEAL OF THE APPELLANT IS ALSO HEREBY DISMISSED THE ORDER OF LD. CIT(A) IS ACCORDING TO THE PRINCIP LES LAID DOWN BY THE HONBLE SUPREME COURT. THEREFORE THE SAME IS CONFIRMED. GROUND NO.2 IS REJECTED AS IT IS PREMATURE TO GIVE ANY FINDING FOR SET OFF EXCEPT ALLOWING THE LOSS SO DETERMINED TO BE CARRIED FORWARD. 7. IN THE RESULT APPEAL IS DISMISSED. ITA NOS.6942 6943 6944 6939 6940 6937 & 6938/MUM/20 11: 8. IN ALL THESE ABOVE SEVEN APPEALS THERE WAS AN A SSESSMENT UNDER SECTION 143(3) ORIGINALLY AND IN SOME CASES THE RET URNED INCOME WAS ACCEPTED AS SUCH AND SOME CASES THE LOSSES WERE DISALLOWED AND MATTER WENT IN FURTHER APPEAL. THE PRESENT APPEALS ARE ON ORDERS UNDER SECTION 143(3) READ WITH 153A/153C. EVEN THOUGH SIMILAR GROUNDS WERE R AISED AS IN ABOVE APPEAL THE ASSESSEES FILED ADDITIONAL GROUND WHICH READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LEARNED DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 4 7 MUMBAI ERRED IN MAKING ADDITIONS VIDE ASSESSMENT ORDER U/S 153A DAT ED 29/12/2010 IN ABSENCE OF SEIZED MATERIAL FOUND DURING THE SEAR CH PROCEEDING. THE APPELLANT PRAYS THAT THE ADDITION MADE BY THE LEARN ED A.O. DETERMINING THE BUSINESS LOSS OF RS. 3 10 04 410/- AS SPECULATI VE LOSS IS BAD IN LAW AND IS REQUESTED TO BE DELETED. 9. THE ADDITIONAL GROUND BEING LEGAL ISSUE WAS ADMI TTED. 10. LD. COUNSEL PLACED FACT SHEETS ON RECORD AND CO NTENDED THAT THE ADDITIONS UNDER SECTION 153A/C CANNOT BE MADE AS TH ERE WAS NO SEIZED MATERIAL AND ORIGINAL ASSESSMENTS COMPLETED HAVE NO T BEEN ABATED. IT WAS FURTHER SUBMITTED THAT THERE ARE ORDERS OF ITAT AND HIGH COURT IN ALL THE CASES SO MAKING DISALLOWANCES IN THE ASSESSMENT AG AIN DOES NOT ARISE. HE ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 7 RELIED ON THE DECISION OF THE SPECIAL BENCH OF ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 137 ITD 787 AND THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT 219 CTR (RAJ) 281 IN SUPPORT OF THE CONTENTIONS. THE LD. CIT DR ACCE PTED THE FACTUAL POSITION. 11. AS SUBMITTED THE ASSESSMENTS U/S. 143(3) HAVE BEEN COMPLETED IN ALL THE CASES ABOVE. THESE ASSESSMENTS WERE EITHER COM PLETED OR SUBJECT MATTER OF APPEALS TO ITAT AND FURTHER TO HIGH COURT. AS T HESE ASSESSMENTS WERE NOT PENDING AS ON THE DATE OF SEARCH THESE CANNOT BE C ONSIDERED AS ABATED. THE SPECIAL BENCH OF ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) HELD THAT IN CASE ASSESSMENT HAS ABATED THE AO RE TAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION U/S. 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. BUT IN O THER CASES THE ASSESSMENT U/S. 153A CAN BE MADE ON THE BASIS OF IN CRIMINATING MATERIAL. IN THESE CASES THE ASSESSMENT U/S. 143(3) HAS BEEN CO MPLETED AND SO MAKING DISALLOWANCE OF THE SAME AMOUNT IN THE PROCEEDINGS U/S. 153A/153C DOES NOT ARISE. THERE CANNOT BE TWO ASSESSMENT ORDERS D ETERMINING THE TOTAL INCOME OF THE ASSESSEE FOR THE SAME ASSESSMENT YEAR ON THE SAME DISALLOWANCE MADE AND CRYSTALLIZED. THEREFORE IN ALL THESE CASES AO SHOULD HAVE REITERATED THE POSITION AS FINALIZED IN THE 14 3(3) PROCEEDINGS COMPLETED ORIGINALLY. INSTEAD HE MADE A FRESH ASSESSMENT W ITHOUT EVEN REFERRING TO THE ORIGINAL PROCEEDINGS WHICH IS BAD IN LAW. 12. NOW WE CONSIDER THE FACTS OF EACH CASE AND DECIDE THE ISSUE ACCORDINGLY. ITA NO. 6944 FACT SHEET ASHOK KUMAR RUIA (HUF) (AY 2005-06) DATE PARTICULARS REMARKS RELEVANT FOR NORMAL ASSESSMENT 24.12.2007 ASSESSMENT ORDER U/S. 143(3) THE LD. ASSESSING OFFICER MADE FOLLOWING ADDITIONS: ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 8 1 . AO TREATED THE LICENSE FEE OF RS.65 00 000/- AS HOUSE PROPERTY INCOME. 2. DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5)-RS.23 25 819/- 3. BUSINESS LOSS OF SHARE TRADING ACTIVITY TREATED AS SPECULATIVE LOSS OF RS.56 65 041/- 24.01.2008 APPEAL FILED BEFORE HONBLE CIT(A)-38 THE APPELLANT FILED AN APPEAL AGAINST ADDITIONS MADE VIDE ABOVE ORDER U/S. 143(3) ON FOLLOWING GROUND. 1. AO TREATED THE LICENSE FEE OF RS.65 00 000/- AS HOUSE PROPERTY INCOME. 2.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5)- RS.23 25 819/- 3.BUSINESS LOSS OF SHARE TRADING ACTIVITY TREATED AS SPECULATIVE LOSS OF 29.02.2012 CIT(A) ORDER 1. HONBLE CIT(A) TREATED THE LICENSE FEE OF RS.65 00 000/- AS OTHER SOURCE OF INCOME. 2. HONBLE CIT(A) CONFIRMED THE ADDITION MADE BY AO ON THE GROUND OF DERIVATIVE LOSS TREATED AS SPECULATIVE LOSS. 23.05.2012 APPEAL BEFORE HONBLE MUMBAI ITAT AGGRIEVED BY THE ABOVE ORDER THE HONBLE CIT(A) APPELLANT FILED AN APPEAL BEFORE HONBLE ITAT ON THE GROUND OF DERIVATIVE LOSS TREATED AS SPECULATIVE LOSS. RELEVANT FOR THE CIT ORDER U/S. 263 02.12.2009 CIT - 18 ORDER U/S. 263 HONBLE CIT - 18 PROPOSED TO TREAT THE LICENSE FEE AS INCOME FROM OTHER SOURCES. 14.01.2010 APPEAL BEFORE HONBLE MUMBAI ITAT AGGRIEVED BY THE ABOVE ORDER OF HONBLE CIT APPELLANT FILED AN APPEAL BEFORE HONBLE ITAT. 12.08.2011 ITAT ORDER HONBLE ITAT QUASHED THE PROCEEDINGS U/S. 263. RELEVANT FOR SEARCH ASSESSMENT 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE 29.12.2010 ASSESSMENT ORD ER U/S. 153C THE LD. ASSESSING OFFICER MADE FOLLOWING ADDITIONS ON THE BASIS OF ORIGINAL ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 9 ASSESSMENT: 1.BUSINESS LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5)- RS.23 25 819/- (IN RESPECT TO THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDINGS.) 13. THE APPEAL ON ORDER U/S. 143(3) WAS DECIDED ABO VE IN ITA NO. 3658/MUM/2012 VIDE PARA NO.2 TO 7. CONSEQUENT TO C ONFIRMING THE DISALLOWANCE MADE IN THE ORDER ON SPECULATIVE LOSS THE SAME NEED NOT BE AGAIN CONSIDERED IN THE PRESENT PROCEEDINGS. AO IS DIRECTED TO STATE THE ABOVE FACT AND DETERMINE THE INCOME U/S. 143(3) R.W. SEC. 153A AT THE SAME AMOUNT IN THE CONSEQUENTIAL ORDER. THE ASSESSEES ADDITIONAL GROUND IS ACC ORDINGLY ALLOWED. ITA NO. 6942/MUM/2011 - FACT SHEET ASHOK KUMAR RUIA: (AY 2003-04) DATE PARTICULARS REMARKS RELEVANT FOR NORMAL ASSESSMENT 22.12.2005 ASSESSMENT ORDER U/S. 143(3) THE LD. ASSESSING OFFICER ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE UNDER THE SCRUTINY ASSESSMENT. RELEVANT FOR SEARCH ASSESSMENT 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE 29.12.2010 ASSESSMENT ORDER U/S. 153A THE LD. ASSESSING OFFICER MADE FOLLOWING ADDITIONS: 1. DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5)- RS.3 10 04 410/- (IN RESPECT TO THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDINGS.) ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 10 14. SINCE INCOME AS OFFERED WAS ACCEPTED IN AS SESSMENT U/S. 143(3) DT. 22.12.2005 BEFORE THE SEARCH (20.2.2008) AND SO A S THAT ASSESSMENT HAS NOT ABATED AO CANNOT MAKE ANY DISALLOWANCE IN THE ABSE NCE OF ANY INCRIMINATING MATERIAL. THEREFORE THE ORDER U/S. 153A MAKING DI SALLOWANCE IS BAD IN LAW. AO IS DIRECTED TO ACCEPT THE INCOME COMPUTED U/S. 1 43(3) DT. 22.12.2005. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED O N THE ADDITIONAL GROUND. OTHER TWO GROUNDS NEED NOT BE ADJUDICATED AS THEY B ECOME ACADEMIC IN NATURE. ITA NO. 6943/M/11- FACT SHEET ASHOK KUMAR RUIA: (AY 2005-06) DATE PARTICULARS REMARKS RELEVANT FOR NORMAL ASSESSMENT 07.06.2007 ASSESSMENT ORDER U/S. 143(3) THE LD. ASSESSING OFFICER ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE UNDER THE SCRUTINY ASSESSMENT. RELEVANT FOR SEARCH ASSESSMENT 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE 29.12.2010 ASSESSMENT ORDER U/S. 153A THE LD. ASSESSING OFFICER MADE FOLLOWING ADDITIONS: 1. DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5)-RS.1 13 64 039/- 2. 2.DISALLOWANCE U/S. 14A- RS.1 17 257/- (IN RESPECT TO THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDINGS.) 15. SINCE INCOME AS OFFERED WAS ACCEPTED IN ASSESS MENT U/S. 143(3) DT. O7.06.07 BEFORE THE SEARCH (20.2.2008) AND SO AS T HAT ASSESSMENT HAS NOT ABATED AO CANNOT MAKE ANY DISALLOWANCE IN THE ABSE NCE OF ANY INCRIMINATING MATERIAL. THEREFORE THE ORDER U/S. 153A MAKING DI SALLOWANCES IS BAD IN LAW. ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 11 AO IS DIRECTED TO ACCEPT THE INCOME COMPUTED U/S. 1 43(3). IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED ON THE ADDITIONAL GROUND. OTHER TWO GROUNDS NEED NOT BE ADJUDICATED AS THEY BECOME ACA DEMIC IN NATURE. ITA NO. 6939MUM/2011 - FACT SHEET AMLA ASHOK RUIA (AY-2004-05) DATE PARTICULARS REMARKS 28.10.2006 ASSESSMENT ORDER U/S 143(3) THE LD. AO MADE FOLLOWING ADDITIONS: 1. DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.1 18 90 719 2. DISALLOWANCE U/S 14A RS.12 000 29.11.2006 APPEAL FILED BEFORE HONBLE CIT(A)-XVI THE APPELLANT FILED AN APPEAL AGAINST ADDITIONS MADE VIDE ABOVE ORDER U/S 143(3) 06.03.2007 CIT(A) ORDER BOTH THE GROUNDS WERE DECIDED IN AGAINST OF THE ASSESSEE. 03.06.2007 APPEAL BEFORE HONBLE MUMBAI ITAT AGGRIEVED BY THE ABOVE ORDER OF HONBLE CIT(A) THE APPELLANT FILED AN APPEAL BEFORE HONBLE ITAT. 27.04.2009 ITAT ORDER THE HONBLE ITAT ALLOWED THE APPEAL OF THE ASSESSEE. 14.10.2009 APPEAL BEFORE HONBLE BOMBAY HIGH COURT AGGRI EVED BY THE ABOVE ORDER OF HONBLE ITAT THE REVENUE FILED AN APPEAL BEFORE HONBLE HIGH COURT. 03.02.2010 HIGH COURT ORDER HONBLE BOMBAY HIGH COURT REJECTED THE APPEAL OF THE REVENUE. (ORDER PASSED UNDER RULE 986.) 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. 29.12.2010 ASSESSMENT ORDER U/S 153A THE LD. AO MADE FOLLOWING ADDITIONS:+ 1.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.1 18 90 719 2. DISALLOWANCE U/S 14A- RS.12 000 (IN RESPECT TO THE ABOVE ASSESSMENT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDING) ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 12 16. SINCE INCOME AS OFFERED WAS ACCEPTED IN ASSESSMENT U/S. 143(3) DT. 28.10.2006 BEFORE THE SEARCH (20.02.2008) AND SO AS THAT ASSESSMENT HAS NOT ABATED AO CANNOT MAKE ANY DISALLOWANCE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. THEREFORE THE ORDER U/S. 153A MAKING DISALLOWANCE IS BAD IN LAW. AO IS DIRECTED TO ACCEPT THE INCOME COMPUTED U/S. 143(3) FINALLY CONSEQUENT TO THE ORDERS AS STATED ABOVE AS UPHELD BY THE HONBLE HIGH COURT. IN THE RESULT THE APPEAL OF THE ASSES SEE IS ALLOWED ON THE ADDITIONAL GROUND. OTHER TWO GROUNDS NEED NOT BE ADJUDICATED AS THEY BECOME ACADEMIC IN NATURE. ITA NO. 6940/M/ 11 - FACT SHEET AMLA ASHOK RUIA (AY 2005-06) DATE PARTICULARS REMARKS 04.12.2007 ASSESSMENT ORDER U/S 143(3) THE LD. AO MADE FOLLOWING ADDITIONS: 1. DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.2 98 66 198 2.DISALLOWANCE U/S 14A RS.12 000 24.01.2008 APPEAL FILED BEFORE HONBLE CIT(A)-XVI THE APPELLANT FILED AN APPEAL AGAINST ADDITIONS MADE VIDE ABOVE ORDER U/S 143(3). 11.11.2008 CIT(A) ORDER BOTH THE GROUNDS WERE DECID ED IN FAVOUR OF THE APPELLANT ON MERITS. 06.04.2009 APPEAL BEFORE HONBLE MUMBAI ITAT THE REVENUE FILED AN APPEAL BEFORE ITAT AGAINST THE RELIEF GRANTED BY CIT(A) TO APPELLANT ON DERIVATIVE BUSINESS LOSS TREATED AS SPECULATIVE. 30.04.2010 ITAT ORDER THE HONBLE ITAT ALLOWED THE APPEAL OF THE REVENUE IN VIEW OF THE DECISION OF HONBLE KOLKATA ITAT (SB) IN CASE OF SHREE CAPITAL SERVICES LTD. 07.07.2010 APPEAL BEFORE HONBLE BOMBAY HIGH COURT AGGRIEVED BY THE ABOVE ORDER OF HONBLE ITAT THE APPELLANT FILED AN APPEAL BEFORE HONBLE HIGH COURT. 21.12.2010 ADMISSION OF APPEAL THE QUESTION OF LAW FRAMED BEFORE HONBLE BOMBAY HIGH COURT WAS ADMITTED. 18.04.2011 HIGH COURT ORDER HONBLE BOMBAY HIGH COURT HELD THAT THE LOSSES ARE TO BE TREATED AS SPECULATIVE LOSS U/S 43(5). ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 13 12.08.2011 APPEAL BEFORE HONBLE SUPREME COURT AGGRIEVED BY THE ABOVE ORDER OF HONBLE BOMBAY HIGH COURT THE APPELLANT FILED THE SPECIAL LEAVE PETITION BEFORE HONBLE SUPREME COURT. 08.05.2012 ADMISSION OF SPECIAL LEAVE PETITION. HONBLE SUPREME COURT OF INDIA ADMITTED THE SPECIAL LEAVE PETITIONS. (THE HEARING ON MERITS IS PENDING.) 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. 29.12.2010 ASSESSMENT ORDER U/S 153A THE LD. AO MADE FOLLOWING ADDITIONS:+ 1.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.2 98 66 198/- 2.DISALLOWANCE U/S 14A- RS.31 348/- 3. DISALLOWANCE OF STT PAID RS.5 14 038/- (IN RESPECT OF THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDING) 17. SINCE INCOME AS OFFERED WAS ACCEPTED IN ASSESSMENT U/S. 143(3) DT. 04.12.2007 BEFORE THE SEARCH (20.2.2008) AND AS TH AT ASSESSMENT HAS NOT ABATED AO CANNOT MAKE ANY DISALLOWANCE IN THE ABSE NCE OF ANY INCRIMINATING MATERIAL. THEREFORE THE ORDER U/S. 153A MAKING DI SALLOWANCE IS BAD IN LAW. AO IS DIRECTED TO ACCEPT THE INCOME COMPUTED U/S. 1 43(3) FINALLY CONSEQUENT TO THE ORDERS AS STATED ABOVE. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED ON THE ADDITIONAL GROUND. OTHER TWO GROUND S NEED NOT BE ADJUDICATED AS THEY BECOME ACADEMIC IN NATURE. ITA NO. 6937/M2011 - FACT SHEET ASHOK APPARELS P. LTD (AY 2004-05) DATE PARTICULARS REMARKS RELEVANT FOR NORMAL ASSESSMENT 29.12.2006 ASSESSMENT ORDER U/S 143(3) THE LD AO MADE FOLLOWING ADDITIONS: 1.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 14 RS.65 72 133/- 2.DISALLOWANCE OF DEPRECIATION ON TENANCY RIGHTS AMOUNTING TO RS.5 18 189/- 3. DISALLOWANCE OF DIFFERENCE OF PURCHASE PRICE AMOUNTI NG TO RS.2 06 077/- 4. DISALLOWANCE OF DIFFERENCE OF QUANTITY OF SCRIPT OF RS.56 850/- DISALLOWANCE OF DONATION TO PUBLIC CHARITABLE TRUST OF RS.6 25 000/- 31.01.2007 APPEAL FILED BEFORE HONBLE CIT(A)-VI THE APPELLANT FILED AN APPEAL AGAINST ADDITIONS MADE VIDE ABOVE ORDER U/S 143(3). 05.09.2007 CIT(A) ORDER THE APPEAL WAS PARTLY ALLOWED IN FAVOUR OF THE APPELLANT ON MERITS. 15.12.2007 APPEAL BEFORE HONBLE MUMBAI ITAT AGGRIEVED BY THE ABOVE ORDER OF HONBLE CIT(A) THE APPELLANT FILED AN APPEAL BEFORE HONBLE ITAT. 29.04.2009 ITAT ORDER THE HONBLE ITAT ALLOWED THE APPEAL OF THE ASSESSEE IN RESPECT OF THE DERIVATIVE ISSUE ON THE BASIS OF THE DECISIONS IN CASE OF DCIT VS. SSKI INVESTMENTS SERVICES PVT. LTD. AND M/S. RBK SECURITIES PVT. LTD. VS. ITO. 09.12.2009 APPEAL BEFORE HONBLE BOMBAY HIGH COURT AGGRIEVED BY THE ABOVE ORDER OF HONBLE ITAT THE REVENUE FILED AN APPEAL HONBLE HIGH COURT. 21.12.2010 ADMISSION OF APPEAL THE QUESTION OF LAW FRAMED BEFORE HONBLE BOMBAY HIGH COURT WAS ADMITTED. 18.04.2011 HIGH COURT ORDER HONBLE BOMBAY HIGH COU RT HELD THAT THE LOSSES ARE TO BE TREATED AS SPECULATIVE LOSS U/S 43(5). 11.08.2011 APPEAL BEFORE HONBLE SUPREME COURT AGGRIEVED BY THE ABOVE ORDER OF HONBLE BOMBAY HIGH COURT THE APPELLANT FILED A SPECIAL LE AVE PETITION BEFORE HONBLE SUPREME COURT. 08.05.2012 ADMISSION OF SPECIAL LEAVE PETITION. HONBLE SUPREME COURT OF INDIA ADMITTED THE SPECIAL LEAVE PETITIONS. (THE HEARING ON MERITS IS PENDING.) RELEVANT FOR SEARCH ASSESSMENT 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT TH E RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. 29.12.2010 ASSESSMENT ORDER U/S 153A THE LD. AO MAD E FOLLOWING ADDITIONS: 1.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.65 72 133/- ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 15 2.DISALLOWANCE U/S 14A- RS.22 035/- (IN RESPECT TO THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDING) 18. SINCE INCOME AS OFFERED WAS ACCEPTED IN ASSESS MENT U/S. 143(3) DT. 29.12.2006 BEFORE THE SEARCH (20.2.2008) AND AS TH AT ASSESSMENT HAS NOT ABATED AO CANNOT MAKE ANY DISALLOWANCE IN THE ABSE NCE OF ANY INCRIMINATING MATERIAL. THEREFORE THE ORDER U/S. 153A MAKING DI SALLOWANCE IS BAD IN LAW. AO IS DIRECTED TO ACCEPT THE INCOME COMPUTED U/S. 1 43(3) FINALLY CONSEQUENT TO THE ORDERS AS STATED ABOVE. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED ON THE ADDITIONAL GROUND. OTHER TWO GROUND S NEED NOT BE ADJUDICATED AS THEY BECOME ACADEMIC IN NATURE. ITA NO. 6938/M/2011 ASHOK APPARELS P.LTD (AY 2005-06) DATE PARTICULARS REMARKS RELEVANT FOR NORMAL ASSESSMENT 02.12.2007 ASSESSMENT ORDER U/S 143(3) THE LD AO MA DE FOLLOWING ADDITIONS: 1.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.25 50 090/- 2.DISALLOWANCE OF TH E INTEREST PAID FOR EARNING EXEMPT INCOME U/S. 14A- RS.69 62 190/- 17.01.2008 APPEAL FILED BEFORE HONBLE CIT(A)-VI THE APPELLANT FILED AN APPEAL AGAINST ADDITIONS MADE VIDE ABOVE ORDER U/S 143(3). 13.01.2009 CIT(A) ORDER HONBLE CIT(A) PARTLY ALLO WED TH E APPEAL MADE BY THE ASSESSEE. 1.DERIVATIVE LOSS TREATED AS BUSINESS INCOME 2. DISALLOWANCE U/S 14A CONFIRMED. 17.03.2009 APPEAL BEFORE HONBLE MUMBAI ITAT AGGRIEVED BY THE ABOVE ORDER OF HONBLE CIT(A) THE APPELLANT AND REVENUE BOTH FILED AN APPEAL BEFORE HONBLE ITAT. 29.04.2011 ITAT ORDER THE HONBLE ITAT PASSED THE ORDER AS UNDER: ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 16 1.DISALLOWANCE U/S 14A FOR STATISTICAL PURPOSE 2. DERIVATIVE LOSS TREATED AS SPECULATIVE LOSS. RELEVANT FOR SEARCH ASSESSMENT 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. 29.12.2010 ASSESSMENT ORDER U/S 153A THE LD. AO MAD E FOLLOWING ADDITIONS: 1.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5)- RS.25 50 090/- (IN RESPECT TO THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDING) 19. SINCE INCOME AS OFFERED WAS ACCEPTED IN ASSESSMENT U/S. 143(3) DT. 22.12.2005 BEFORE THE SEARCH (20.2.2008) AND AS TH AT ASSESSMENT HAS NOT ABATED AO CANNOT MAKE ANY DISALLOWANCE IN THE ABSE NCE OF ANY INCRIMINATING MATERIAL. THEREFORE THE ORDER U/S. 153A MAKING DI SALLOWANCE IS BAD IN LAW. AO IS DIRECTED TO ACCEPT THE INCOME COMPUTED U/S. 1 43(3) AS PER THE ORDER OF ITAT ORDER SUBJECT TO ANY ORDER IN APPEAL BY HIGH ER JUDICIAL AUTHORITY. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED O N THE ADDITIONAL GROUND. OTHER TWO GROUNDS NEED NOT BE ADJUDICATED AS THEY BECOME ACADEMIC IN NATURE. 20. THUS IN THE SEVEN APPEALS ABOVE THE AO IS DIRE CTED TO DETERMINE THE INCOME AS FINALIZED IN THE ORIGINAL PROCEEDINGS U/S . 143(3). REPEATING THE SAME ISSUES IN THESE PROCEEDINGS WITHOUT ANY INCR IMINATING MATERIAL IS NOT CORRECT. AS STATED EARLIER THERE IS NO REFERENCE TO THE ORIGINAL PROCEEDINGS. IF THAT WAS MENTIONED BY AO MAKING DISALLOWANCE AGAIN DOES NOT ARISE. WITH REFERENCE TO THE CLAIM OF SET OFF AS DECIDED IN PA RA-6 ABOVE CONSEQUENT TO THE PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT IN TH E CASE OF CIT VS MOHANDAS 59 ITR 699 ISSUE OF SET OFF HAS TO BE E XAMINED IN THE YEAR IN WHICH SET OFF WAS CLAIMED. AO HAS TO TAKE A DECIS ION ON THE ISSUE OF SET OFF IN ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 17 THE YEAR OF SET OFF. MOREOVER THE ISSUE WAS TO BE DECIDED IN PROCEEDINGS U/S 143(3) ORIGINALLY COMPLETED. ISSUE DOES NOT ARISE I N THESE PROCEEDINGS AS WE HAVE ALREADY HELD THAT RE-DETERMINATION OF SAME ISS UES IN THESE PROCEEDINGS DOES NOT ARISE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. THE GROUNDS ARE ACADEMIC IN NATURE. 21. IN THE RESULT ALL THE ABOVE 7 APPEALS ARE TREA TED AS ALLOWED. ITA NO. 6941/ MUM/2011 ASHOK KUMAR RUIA ( AY 2002-03) FACT SHEET: DATE PARTICULARS REMARKS RELEVANT FOR NORMAL ASSESSMENT-THE CASE WAS NOT SEL ECTED FOR THE SECURITY /SCRUTINY ASSESSMENT RELEVANT FOR SEARCH ASSESSMENT 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. 29.12.2010 ASSESSMENT ORDER U/S 153A THE LD AO MADE FOLLOWING ADDITIONS: 1.DERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.43 22 452/-. (IN RES PECT TO THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDING) ITA NO.6936/MUM/2011 ASHOK APPARELS P LTD (AY 2003-04) FACT SHEET DATE PARTICULARS REMARKS RELEVANT FOR NORMAL ASSESSMENT-THE CASE WAS NOT SEL ECTED FOR THE SECURITY /SCRUTINY ASSESSMENT RELEVANT FOR SEARCH ASSESSMENT 20.02.2008 SEARCH AND SEIZURE ACTION CARRIED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. 29.12.2010 ASSESSMENT ORDER U/S 153A THE LD AO MADE FOLLOWING ADDITIONS: 1.D ERIVATIVE LOSS TREATED AS SPECULATIVE BY APPLYING PROVISIONS OF SECTION 43(5) RS.63 222/-. (IN RESPECT TO THE ABOVE ADDITION NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH PROCEEDING) ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 18 22. LIKE IN OTHER CASES ASSESSEE RAISED ADDITIONAL GRO UND ON THE JURISDICTION TO PROCEED U/S 153A. THE FACTS IN THESES CASE ARE T HAT THERE WERE NO SCRUTINY ASSESSMENTS AS SUBMITTED BY THE ASSESSEE COUNSEL IN THE FACT SHEET. THE ARGUMENTS OF THE LD. COUNSEL ARE THAT EVEN IN THE C ASE WHERE ASSESSMENTS ARE COMPLETED U/S.143(1) AO CANNOT DISTURB THE FINALIZ ED MATTERS IN THE PROCEEDINGS U/S. 153A. HE RELIED ON THE DECISION OF : I) SHRI GURINDER SINGH BAWA VS. DCIT IN ITA NO.2075/MU M/2010 AND ITA NO.2669/MUM/2010 FOR ASSESSMENT YEAR 2005-06 ORDER DATED 16.11.2012; II) HIREN N. PATEL VS. ACIT IN ITA NO.39 TO 41/MUM/2010 FOR ASSESSMENT YEARS 2004-05 2005-06 AND 2006-07 ORDER DATED 12.10.2012 AND III) ATITHI N. PATEL VS. ACIT IN ITA NOS. 43 TO 45/MUM/2 010 FOR ASSESSMENT YEARS 2004-05 2005-06 AND 2006-07 ORDER DATED 22.0 8.2012. 22.1 THE LD. COUNSEL RELIED ON THE DECISION OF HON' BLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT [(2013) 259 CTR (RAJ.) 2 81] FOR DRAWING SUPPORT THAT IF NOTHING INCRIMINATING IS FOUND THEN NO ADDITION IN THE ASSESSMENT CAN BE MADE. THE LD. DR IN REPLY HOWEVER RELIED ON THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF SCOPE (P.) LTD. VS. DCIT [(2013) 33 TAXMANN.COM 167 ] IN SUPPORT OF THE CONTENTION THAT THE ORIGINAL ASS ESSMENT U/S. 143(3) WAS NOT DONE AO CAN ASSESS TOTAL INCOM E BY MAKING ADDITION ON ACCOUNT OF UNDISCLOSED INCOME OR INCOME ESCAPED ASS ESSMENT. HE ALSO RELIED ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. MUKUNDKUMARI OF NAWANAGAR VS. INCOME TAX OFFICER [( 1979) 2 TAXMANN 73] GIVEN UNDER THE WEALTH TAX ACT FOR THE PROPOSITION THAT ONCE LEGISLATION INCORPORATES A PARTICULAR PROCEDURE THAT CAN NOT BE UNDONE BY ITAT. HE ALSO RELIED ON THE DECISION OF HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA VS. DCIT (346 ITR 106) . ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 19 23. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. EVEN THOUGH BOTH PARTIES ARGUED THEIR CASE VEHEMENTLY WE ARE UNABLE TO ACCE PT THE ASSESSEE CONTENTIONS IN THE ABSENCE OF ANY INFORMATION ON FI LING RETURN ORIGINALLY AND ACCEPTANCE OF THE SAME UNDER SECTION 143(1) OF THE ACT BY AO. THE LEGAL PROPOSITIONS RAISED CAN NOT BE APPLIED IN THE ABSEN CE OF BASIC FACTS. AS SEEN FROM THE FACT SHEET ASSESSEE DID NOT PLACE ON RECOR D THE FACT OF FILING RETURN ORIGINALLY. NOR THERE ANY COPIES PLACED ON RECORD T O VERIFY THE SAME. ASSESSMENT ORDER ALSO START WITH ONLY PROCEEDINGS U NDER 153A. EVEN BEFORE THE CIT(A) ASSESSEE NEITHER STATED THAT ORIGINAL R ETURN WAS FILED NOR PROCESSED UNDER 143(1) BY AO. THE STATEMENT OF FACTS BEFORE CIT(A) ALSO DOES NOT MENTION ANY THING ABOUT THIS SO AS TO VERIFY. THERE WERE NO GROUNDS ON THAT ISSUE BEFORE CIT(A). FOR THE FIRST TIME ASSESSEE CO NTESTED THE ISSUE BEFORE THIS FORUM IN THE ADDITIONAL GROUND RAISED. IN THE ABSEN CE OF ANY EVIDENCE ON RECORD IT VERY DIFFICULT TO ACCEPT ASSESSEE CONTEN TION THAT PROCEEDINGS NOW UNDERTAKEN ARE BAD IN LAW. THEREFORE ASSESSEE CONT ENTIONS ON ADDITIONAL GROUND RAISED ARE REJECTED. 24. THE OTHER GROUNDS ARE COMMON TO THE APPEAL DEC IDED IN THE CASE OF ASHOK KUMAR RUIA(HUF) IN APPEAL ITA NO.3658/M/2012 ABOVE FROM PARA 2 ONWARDS. IT WAS FAIRLY ADMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THE ISSUE IN GROUND NO.1 IS AGAINST THE ASSESSEE BY THE ORDER OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BHARAT RUIA IN ITA NO.1539 OF 2010 WHEREIN IT WAS HELD THAT THE LOSSES ARISING ON DERIVATIVE TRANSACTIONS ARE SPECULATIVE IN NATURE AND TO BE ASSESSED ACCORDINGLY. IT WAS FURTHER HEL D THAT THE PROVISO (D) TO SECTION 43(5) INSERTED BY THE FINANCE ACT 2005 IS APPLICABLE FOR ASSESSMENT YEAR 2006-07 AND SUBSEQUENT ASSESSMENT YEARS AND TH E SAID AMENDMENT HAS NO RETROSPECTIVE APPLICATION. ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 20 25. CONSIDERING THE LEGAL PRINCIPLES ON THE ISSUE AS PRONOUNCED BY THE HONBLE HIGH COURT IN THE ABOVE REFERRED CASE AS THE FACTS ARE SAME WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). ACCORDINGLY GROUND NO.1 IS REJECTED. 26. AS REGARDS THE GROUND NO.2 THE ISSUE OF SET OF F WILL ARISE IN THE YEAR OF SET OFF. THE LD. CIT(A) HAS HELD AS UNDER: 7.0 I HAVE CAREFULLY EXAMINED THE ALTERNATIVE CON TENTION OF THE APPELLANT SEEKING A DIRECTION TO THE A. 0 FOR ALLOW ING THE SET OFF OF SPECULATIVE LOSS FROM DERIVATIVES TRADING OF THE YE AR OF APPEAL AGAINST THE PROFITS REPORTED FROM THE SAME BUSINESS ACTIVITY I .E. DERIVATIVES TRADING. THE ISSUE OF ELIGIBILITY OF SET OFF OF LOSSES OF AN EARLIER ASSESSMENT YEAR AGAINST THE INCOME FROM A PARTICULAR SOURCE OR UNDE R A SPECIFIC HEAD OF INCOME OF SUBSEQUENT YEAR HAS TO BE EXAMINED AND DE TERMINED ONLY IN THE YEAR OF SET OFF AND NOT IN THE YEAR IN WHICH TH E LOSS IS DETERMINED AND MERELY ALLOWED TO BE CARRIED FORWARD. THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MANMOHAN DAS (1966) (059 ITR 0699) SUPPORTS SUCH A VIEW. AS HELD BY THE HONBLE SUPREME COURT (SUPRA) A. 0 HAS TO TAKE A DECISION ON THE ISSUE O F SET OFF OF CARRY FORWARD OF LOSSES IN THE YEARS OF SET OFF. THEREFORE I DO NOT FIND ANY MERIT IN THE ALTERNATIVE CONTENTION OF THE APPELLANT THIS GROUND OF APPEAL OF THE APPELLANT IS ALSO HEREBY DISMISSED THE ORDER OF LD. CIT(A) IS ACCORDING TO THE PRINCIP LES LAID DOWN BY THE HONBLE SUPREME COURT. THEREFORE THE SAME IS CONFIRMED. GROUND NO.2 IS REJECTED AS IT IS PREMATURE TO GIVE ANY FINDING FOR SET OFF EXCEPT ALLOWING THE LOSS SO DETERMINED TO BE CARRIED FORWARD. 27. THESE TWO APPEALS OF ASSESSEE ARE REJECTED. 28. IN THE RESULT ASSESSEES APPEAL IN ITA NOS. 6942/M/11 FOR AY: 2003-04; 6943/M/11 FOR AY: 2005-06; 6944/M/11 FOR AY: 2005-06; 6939/M/11 FOR AY: 2004-05; 6940/M/11 FOR AY: 2005-06; 6937/M/11 FOR AY :2004-05 AND ITA NO.ASHOK RUIA GROUP(10 APPEALS) A.Y. 21 6938/M/11 FOR AY: 2005-06 ARE ALLOWED AND ASSESSEES APPEAL IN ITA NOS. 3658/M/12 FOR AY: 2005-06; 6941/M/11 FOR AY : 2002-03 AND 6936/M/11 FOR AY: 2003-04 ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY 2013. SD/- SD/- (VIVEK VARMA ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI DATED: 26/07/2013. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.