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TMI Blog2015 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... hat:- As per above discussion, we have seen that none of the objections raised by the assessee in the Misc. Application is having any merit and therefore, this Misc. Application is liable to be dismissed. - Decided against the appellants. - M.A. No.106/LKW/2014, Arising out of I.T.A.No.217/Lkw/2012, M.A. No.107/LKW/2014, Arising out of I.T.A.No.218/Lkw/2012, M.A. No.108/LKW/2014, Arising out of I.T.A.No.219/Lkw/2012, M.A. No.109/LKW/2014, Arising out of I.T.A.No.220/Lkw/2012, M.A. No.1 - - - Dated:- 16-4-2015 - Shri Sunil Kumar Yadav And Shri A.K. Garodia JJ. For the Applicant : Shri P. K. Kapoor, C.A. For the Respondent : Shri Puneet Kumar, D. R. ORDER Per A. K. Garodia, A.M. All these Misc. Applications are filed by different assessees pointing out a common mistake in a combined Tribunal order dated 30/06/2014. All these Misc. Applications were heard together and are being disposed of by way of this common order for the sake of convenience. 2. All these Misc. Applications are identical and therefore, we reproduce the contents of Misc. Application no. 106/Lkw/2014, which are as under: May it please your honours; The above mentioned assessee / r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the capital loss arising out of sales of shares under the same facts and circumstances were disallowed by the Hon ble Court. 4. That the order of Ld. Commissioner of Income Tax (A)-I, Kanpur being erroneous in law and on the facts deserves to be vacated and that the order of Assessing Officer is restored. 5. The appellant craves leave to modify any of the grounds of the appeal given above and or add any fresh grounds as and when it is considered to do so. 4. It is stated that the controversy that had arisen at the assessment stage, was as to whether the assessee was justified in claiming short-term capital loss on sale of shares held by him in M/s Shakumbari Sugar and Allied Industries Ltd. (SSAIL for short), acquired on 07.12.2007 and sold on 15.12.2007. The Assessing Officer had denied the claim by holding that the assessee was prompted to acquire the shares of said SSAIL only a few days before the same were sold for extraneous consideration of benefitting the preferential share holders of the company as also to ensure the payment of lenders of unsecured loans (Para 4.5 of the assessment order). A brief resume of the overall facts of the case with cross-reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a large number of case laws which were fully applicable on the facts of the case. An extract of relevant paras of the appellate order being paras no.4, 4.1, 4.2, 4.3, 4.4, 4.5 5 under the head Discussion Decision is enclosed and the same has been marked as ANNEXURE-II (pages 17 to 19) hereto. 8. Full text of such case laws relied upon by the CIT(A) and also other case laws (on which the assessee sought to rely in the proceedings before the Hon ble ITAT also) are appearing in the compilation running into 139 pages filed before the Hon ble ITAT. A bare perusal of the said case laws goes to show that the same were fully applicable to the facts of the present case as have been summarized in the Facts of the Case (Annexure-I), on all fours. 9. It will also be seen from a perusal of the order of the ld. CIT(A) that while considering the overall background of the case, he had appreciated the factors responsible for issuance of shares on 07.12.2007 at the face value thereof and sale of the same on 15.12.2007 to M/s India Glycol Ltd. on the price determined on the basis of valuation of the business enterprise as had been made by an independent valuer. Only after such an anal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereto, as is evident from head notes of the said case laws as reproduced hereunder:- (i) Bharat Hari Singhania (HUF) vs. ACIT, ITAT Cal, 58 ITD 819 capital loss -Chargeability-Extinguishment of right- Assessee held shares of a company-value of shares became nil as liabilities of company exceeds the assets-one unit of company was nationalized-Also High Court directed that company be wound up-Assessee s claim of capital loss in respect of shares rejected- Justified-Merely because the liabilities of company far exceeded the assets and, therefore, the value of the shares became nil, it cannot be stated that there was a transfer of the capital asset-Further unless and until High Court passes dissolution under s.481 of the Companies Act, it is not possible to say that right of shareholder comes to an end-Also s.46(2) comes into operation on when the assessee receives any money or other assets from the company under liquidation- Hence there is no transfer of shares or extinguishment of assessee s right-No capital loss, therefore, can be computed. (ii) Kerala Small Industries Development Corpn. Ltd. vs. CIT 270 ITR 452 Business Expenditure - Business Loss - State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct regarding total share holding and how much long term capital loss was claimed by the assessee in respect of old shares held by the assessee and whether the same was allowed by the Assessing Officer or not. The order of learned CIT(A) is without throwing any light on these aspects. Hence, in our considered opinion, the matter has to go back to the file of the learned CIT(A) for fresh decision after examining all these facts but such decision should be as per these guidelines. (page 6) and remanded the matter back to the file of learned CIT(A) for fresh adjudication. It is submitted that the above referred observations are due to non-consideration of the paper book which contained all the information as was relevant for the adjudication of the controversy as has been referred to in Para 4 hereinfore. Non-consideration of the relevant material/pleas as has been placed before the Hon ble ITAT, itself constitutes a mistake apparent from record. 16. It is submitted that the compilation referred to in Para 12 hereinfore not only contained all the well-documented information but also the judicial pronouncements which are fully applicable on the facts of the case (as have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any and consequently the shareholders, the same was incurred till this date and it cannot be said that further loss was incurred between 07.12.2007 to 15.12.2007. Hence, the loss in hands of the shareholder should also be in respect of old shares held by him on 07.12.007. It should be presumed that more shares were issued to garner enough funds for making repayment of preference shares alongwith the accumulated dividend and other liabilities. Thereafter, the sale of shares on 15.12.2007 should be presumed at the same price because increase in share capital will result into decrease of liability i.e. preference shares, accumulated dividend and other bank loans etc. by same amount and as a consequence thereof, the new shares to be acquired by the assessee on 07.12.2007 will be sold at the same price and it will not result into any short term capital loss but the long term capital loss in respect of sale of old shares will go up. 7. ..So far the issue of new shares at a price below than the face value is concerned, we find that such issue of shares at a discount is permissible as per the Companies Act and hence, there is no problem on that aspect. Accordingly, the order of CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is respectfully prayed that the Hon ble Bench be pleased; (a) to deal with and decide the issues that have been raised in this Misc. Application; and (b) pass an appropriate order, either modifying or recalling the order dated 13.06.2014, which is the subject matter of this Misc. Application. 3. In the course of hearing before us, Learned A.R. of the assessee reiterated the contentions raised in the Misc. Application, as reproduced above. He also submitted that reliance was placed on the following judicial pronouncements in course of hearing of these appeals but were not considered in the tribunal order: (i) Eveready Industries India Ltd. vs. CIT [2011] 334 ITR 413 (Cal) (ii) Union of India vs. Azadi Bachao Andolan [2005] 263 ITR 706 (SC) (iii) CIT vs. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1 (SC) (iv) CIT vs. Shivakami Co. (P) Ltd. [1986] 159 ITR 71 (SC) (v) Sivakami Company Private Ltd. vs. CIT [1973] 88 ITR 311 (Mad) (vi) Lalchand Bhagat Ambica Ram vs. CIT [1959] 37 ITR 288 (SC) (vii) CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC) 4. Learned D.R. of the Revenue submitted that there is no mistake in the Tribunal order, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer to record the statement of Shri Dinesh Singh, ACA and Shri G. K. Lath to ascertain whether Shri Dinesh Singh is representing before the Department in his individual capacity or as a partner of M/s Sachdeva Co. and in what capacity Shri G. K. Lath received the notice u/s 143(2) of the Act. Under these facts, it was the argument of the assessee before Hon'ble High Court that it was not permissible for the Tribunal to direct to admit fresh evidence in the matter. Under these facts, it was held by Hon'ble High Court that it was not open for the Tribunal to take fresh material on record because Hon'ble High Court has directed the Tribunal to adjudicate the matter afresh on the basis of material on record. It was also held that the direction issued to an authority or Tribunal to do a certain thing in a certain manner, the thing must be done in that manner and in no other manner. In the present case, the appeals were decided by the Tribunal for the first time and the impugned order was not on the basis of any direction of Hon'ble Allahabad High Court and it is not the case of the assessee that any direction of Hon'ble Allahabad High Court has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said compilation and therefore, there is no mistake in the Tribunal order. Moreover, reference was made by the tribunal to two judgments in Para 4 of the tribunal order and thereafter in Para 7, it is observed by the tribunal that these judgments are not applicable because the same are not on this aspect on which the issue was decided by the tribunal. Hence, it cannot be said that the cited judgments were not considered. 7. However, even if we consider the remaining judgments, the result does not change. The first judgment is of Hon ble Calcutta High Court in the case of Eveready Industries India Ltd. v. CIT, 334 ITR 413. In this case, the issue in dispute was regarding Dividend Stripping transaction and the A.Y. involved was A.Y. 1990 - 91 and Section 94 (7) was inserted in the Act w.e.f. A.Y. 2002 - 03. It was held that the provisions of section 94 (7) are prospective and not retrospective. In the present case, this is not the dispute that any section is invoked by the A.O. which is not in the statute book in the relevant year. Hence, this judgment is not applicable. 7.1 The second judgment is Union of India vs. Azadi Bachao Andolan, 263 ITR 706. This was already conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Net Worth ₹ 1069.39 Lacs No. of Share on this day 9,84,42000 Net Worth per Share ₹ 1.086 Per Share As against this book value of ₹ 1.086 per share on 07.12.2007, the assessee has agreed to buy new shares at ₹ 10 per share and sold the same for Rs. 3.15 per share within 8 days. On the basis of these facts, the finding is given by the tribunal that there is no loss during this period of 07.12.2007 to 15.12.2007, which cannot be said to be a finding of fact on the basis of conjecture, surmises or mere suspicion and hence this judgment is also not applicable in the present case. 7.5 The next judgment is of Hon ble Apex Court in the case of CIT vs. Durga Prasad More 82 ITR 540. This judgment is in fact supporting the case of revenue and not of the assessee. In this case, it was held by Hon ble Apex Court that The Tribunal is the final fact finding body. It cannot be said that its finding as to the unreality of the trust put forward is not based on any evidence or the same is otherwise vitiated. Prima facie the said finding is a finding of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the facts and circumstances of the case and therefore, this objection is also without any merit. In fact no such argument was raised in course of hearing of these appeals and thus objections cannot be now raised in course of Misc. Application proceedings u/s 254(2) of the Act. 9. We also deal with the objection raised in Para 21 of the M.A. stating that the tribunal has directed to collect further material/evidence. We want to make it clear that there is no such direction to collect any further material/evidence. In fact the tribunal directed to work out net asset value of shares of SSAIL on 07.12.2007. Now in Para 6 above, we have already done this exercise on the basis of material already available on record and the same is worked out ad ₹ 1.086 per share. The A.O. should adopt this value for carrying out the directions of the tribunal in Para 6 of the impugned tribunal order. 10. As per above discussion, we have seen that none of the objections raised by the assessee in the Misc. Application is having any merit and therefore, this Misc. Application is liable to be dismissed. We order accordingly. 11. It was agreed by both the sides that the impugned Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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