TMI Blog2013 (8) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ession that the assessee had not raised any dispute on the facts found by the Assessing Officer, calls for interference by this Court - Following decision of M/s.Kranti Associates Pvt. Ltd. and another V. Sh.Masood Ahmed Khan and others [2010 (9) TMI 886 - SUPREME COURT OF INDIA] - Decided in favour of assessee. - Tax Case (Appeal) Nos.202 and 203 of 2012 & M.P.Nos.1 and 1 of 2013 - - - Dated:- 22-7-2013 - Chitra Venkataraman And K. B. K. Vasuki,JJ. For the Appellants : Mr. M. S. Syali, S.C. Mr. Mayank Nagi for Dr. Anita Sumanth For the Respondent : Mr. T. Ravikumar Standing Counsel for Income Tax JUDGMENT (Judgment of the Court was delivered by Chitra Venkataraman,J.) The above Tax Case (Appeals), filed at the instance of the assessee as against the order of the Income Tax Appellate Tribunal for the assessment year 2005-06, was admitted by this Court on the following common substantial question of law: "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that receipts from sale and purchase of various shares/securities should be treated as business income and not short term capital gains?" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Assessing Officer viewed that on an average, the holding period of these shares ranged from 2 to 45 days and in some cases, the shares were sold immediately. The assessee had also taken funding from M/s.ILFS for trading in securities and had shown the profits made through the funding amounting to Rs.17,57,808/- as capital gains. Taking the view that the transactions made in cash segment from 01.10.2004 to 31.3.2005 were all executed in the normal course of business and not as investments, assessment was sought to be made as business income. 5. This was countered by the assessee that he had held the shares for earning dividend income and capital appreciation and he had also borrowed capital for the purpose of business. The submission of the assessee was, however, negatived by the Assessing Officer holding that the transactions during the period 01.04.2004 to 30.9.2004 were treated by the assessee as stock-in-trade and offered the gain or loss under the head 'business'. However, after 01.10.2004, the assessee had shifted his stand treating the trading of shares and securities as by way of investment. Thus the Assessing Officer rejected the assessee's stand to treat the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from business to investment without showing any valid cause. Thus holding, the Tribunal allowed the appeal filed by the Revenue. Hence, the present appeals have been preferred at the instance of the assessee. 9. It is a matter of record that after allowing the Revenue's appeal, the assessee filed Rectification Petition before the Tribunal contending that the assessee had not admitted the facts as had been stated by the Assessing Officer to ultimately treat the income as business income. Referring to the findings of the Commissioner of Income Tax (Appeals), the assessee pointed out that such observation by the Tribunal was a mistake apparent on the face of the record requiring rectification. It is also a matter of record that while the Accountant Member agreed with the assessee that the mistake pointed out by the assessee was an error apparent on the face of the record and hence directed the hearing of the appeal in the usual course, the Judicial Member, however, took a different view that under the garb of rectification of mistake, it was not possible for a party to take a further chance to reargue the appeal already decided and rejected the rectification petition. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting the rectification petition remaining unchallenged, there is no gain saying on the part of the assessee to contend that the observation of the Tribunal was wrong. In any event, when the Tribunal has given a factual finding as to the nature of transaction, the order does not call for any interference. 14. Heard learned Senior counsel appearing for the appellants and the learned Standing counsel appearing for the respondent and perused the materials placed before this Court. 15. We do not agree with the line of submission by the learned standing counsel appearing for the Revenue that on the sole ground of the order in the rectification petition not being challenged in the manner known to law, the order of the Tribunal would reach a finality. A reading of the order of the Tribunal clearly shows the perfunctory manner of the disposal of the appeal. This is more so in the context of the findings rendered by the Commissioner of Income Tax (Appeals) allowing the assessee's appeal on the findings of fact arrived at by the Commissioner of Income Tax (Appeals), which was a subject matter of appeal before the Tribunal at the instance of the Revenue. 16. As rightly pointed out by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of his conclusions and the decision of the Apex Court pointing out that insistence on reason is a requirement for both judicial accountability and transparency, it goes without saying that the order passed by the Tribunal on the mistaken impression that the assessee had not raised any dispute on the facts found by the Assessing Officer, calls for interference by this Court. 21. Thus, without going into the merits of the contentions made by the assessee, this Court has no hesitation to set aside the order of the Tribunal, thereby direct the Tribunal to hear the appeal de novo and pass orders in accordance with law. 22. Since the Tribunal has passed a common order in respect of the same issue in the case of the company, wherein the assessee in T.C.(A)No.203 of 2012 is the Managing Director and the nature of transactions and the applications made being similar, the order passed in T.C.(A)No.203 of 2012 would be applicable to the T.C.(A)No.202 of 2012. 23. In the circumstances, both the Tax Case (Appeals) are allowed and the matters are restored to the files of the Tribunal for fresh consideration. No costs. Consequently, M.P.Nos.1 and 1 of 2013 are closed. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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