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TMI Blog2016 (8) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... h was corrected by the CIT(A) in proceedings u/s.263 of the Act and rightly affirmed by the Tribunal. In view of the aforesaid discussion, both the questions are answered in favour of the Revenue and against the assessee. - TAX APPEAL NO. 240 of 2006 - - - Dated:- 16-6-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR JP SHAH, ADVOCATE, MR MANISH J SHAH, ADVOCATE FOR THE OPPONENT : MR M.R. BHATT, SENIOR ADVOCATE WITH MR KARAN SANGHANI, ADVOCATE AND MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. This Tax Appeal under Section 260A of the Incometax Act, 1961 is filed against the order dated 29.08.2005 passed by the Income Tax Appellate Tribunal, Ahmedaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order passed u/s.143(3) of the Act was erroneous and prejudicial to the interests of the Revenue. Thereafter, vide order dated 30.11.1998, the CIT(A) set aside the assessment and issued direction to the Assessing Officer to frame the assessment afresh. 4. Being aggrieved by the aforesaid order, the assessee preferred appeal before the Tribunal. However, the Tribunal dismissed the appeal filed by the assessee, vide order dated 29.08.2005. Hence, this Tax Appeal. 5. Mr. J.P. Shah, learned counsel appearing for the appellantassessee, submitted that the basis of the Notice issued by CIT(A) was the assertion that up to 31.03.1993, the shares sold were stockintrade and had been converted to investment. Therefore, business profit and short t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal, is erroneous and deserves to be quashed and set aside. 5.3 In support of his submissions, reliance is placed on the following decisions: (A) In Malabar Industrial Co. Ltd. v. Commissioner of Incometax, [2000] 243 ITR 83 , the Apex Court held that the phrase prejudicial to the interests of the Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Incometax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue; or where two views are possible and the Incometax Officer has taken one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted any error in exercising powers u/s.263 of the Act and the Tribunal was also justified in dismissing the appeal filed by the assessee. 6.2 Learned Senior Advocate Mr. Bhatt submitted that even in the decision rendered in Malabar Industrial Co. Ltd. (supra) relied upon by learned counsel for the assessee, the Apex Court observed that an incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Incometax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 2(14) of the Act at the time of sale. Therefore, profits from the sales were chargeable as capital gains. The cost of acquisition of the lands was their cost when they were first acquired by the assessee and since the lands had been acquired prior to 1st January, 1954, the assessee had the option u/s.55(2) to substitute the fair market value of the lands as on 1st January, 1954. The facts in the aforementioned case and the facts of this case are completely different. 9.1 In the present case, the shares and securities were acquired much earlier and all throughout they were treated as stockintrade. It was only on 31.03.1993, viz. when Resolution was passed by the Board of Directors of the assessee company, that they were converte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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