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04-04-2019, Ritu Sanjay Mantry, Section 254(2), 68, 10(38), Tribunal Mumbai

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1 week 2 days ago #9104 by amit
Section - 254(2), 68, 10(38), 148, 69, 133(6)
Order Date - 04-04-2019
Favouring - Revenue
Court - Tribunal Mumbai
Appellant - Ritu Sanjay Mantry
Respondent - ITO
Justice - SHAMIM YAHYA AM
Citation - 419Taxpundit139
Appeal No. - ITA no.2003/Mum./2017
Asstt. Year - 2008–09

Order

PER : SHAMIM YAHYA

By way of this misc. application, the assessee seeks rectification of mistake under section 254(2) of the Income–tax Act, 1961 (for short "the Act") in the order dated 9th February 2018, passed by the Tribunal in ITA no.2003/Mum./2017, pertaining to the assessment year 2008–09.

2. Before us, the submissions of the learned Counsel for the assessee are as under:–

“4. Under the above circumstances, the Applicant most respectfully submits that certain inadvertent errors have crept in, in the order passed by the Hon‟ble Tribunal which are as under:–

i. While affirming the order of the CIT(A), the Hon‟ble Tribunal has observed that Link Intime India Pvt. Ltd., the registrar authority for Cable Corporation of India Ltd. had stated in their reply dated 27.02.2015 to the AO that as per the details available with them the Appellant was not holding any shares in Cable Corporation of India Ltd. on 21.02.2008 and 31.03.2008 (Ref.pg.4 of Assessment Order). Based on this reply, the Tribunal has observed that the transaction entered into by the Appellant was bogus (Ref.pg.10,11 of Ex.A). However, the Appellant had actually sold all the shares o Cable Corporation India Ltd. by 04.02.2008 which were moved out of the demat account by 06.02.2008. In this regard, the demat statement issued by HDFC Bank Ltd. the depositoryparticipant with whom the Appellant held its demat account, reflecting the sale was also produced and pointed out at the time of hearing before the Tribunal (Ref. pg.20 of Ex. B). The Appellant not only relied on the said demat statement at the time of hearing but also categorically pleaded before the Tribunal that, the reply from Link Intime India P. Ltd. did not hold anything against the Appellant since, the Appellant sold all the shares of CableCorporation by 06.02.2008 whereas as per the reply of Link Intime, the Appellant did not hold any shares of Cable Corporation on 2 .02.2008 and 31.03.2008 i.e. days after the shares were actually sold by the Appellant. The Appellant therefore, respectfully submits that, this observation of the Tribunal at para.16 pg.11 of its order holding the sale of the shares by the Appellant as bogus on the basis of the reply from Link Intime India P. Ltd. is in fact contrary to the facts on record since Link Intime has nowhere said that the Appellant was never holding the shares or that it had never sold the shares of Cable Corporation of India Ltd. as reflected in its demat statements issued by HDFC Bank. Further the dates on which the Appellant did not hold shares are in fact of a period after the shares sold by the Appellant and as such the reply does not hold anything against the Appellant. It is therefore pleaded that this observation at para 16 pg.11 be accordingly reversed and rectified.

ii. The Tribunal has further observed at para 17 pg.11 of its order that the shares of an unknown company were sold. This observation is again factually incorrect since Cable Corporation of India Ltd. is a reputed company incorporated since 1957 and was also highly traded during the period when the Appellant sold the shares. In fact, the networth of the said company had almost tripled in 2008-09. The said scrip is not among those companies allegedly run by Mr. Mukesh Chokshi, In fact, the entire details of Cable Corporation were also pointed out and furnished before the Hon'ble Tribunal at the time of hearing (Ref.pg. 3 of Ex. B) which is in fact also reproduced by the CIT(A) in his order at pg.7 but it seems that has inadvertently skipped the attention of the Tribunal. As such, it seems that the Hon'ble Tribunal has inadvertently erroneously held that Cable Corporation of India Ltd. is an unknown company since such observation is erroneous and even not borne out of the records.

iii. The Tribunal further observed that the shares of the said company were sold in an off-market deal. This observation is again factually incorrect in as much as the sale has been made by the Appellant on the National Stock Exchange (NSE) through its depository participant HDFC Bank with whom the Demat account was held by the Appellant. As such the sale was not an off-market deal as erroneously observed In fact, elaborate details evidencing the sale were furnished, relied on and pointed out at the time of hearing before the Hon'ble Tribunal. More particularly, the broker notes evidencing sale and SIT paid (Ref. pg. 11 to 18 of Ex.B), the bank statement reflecting receipt of consideration for sale (Ref. pg. 19 of Ex.B) and copy of demat statement of the Appellant evidencing the transfer of the shares from her account (Ref.pg 20 and pg.32 of Ex.B). Not only that, it was also pointed out that the entire transaction is verifiable on the official website NSE (Ref.pg.4 of Ex. B). However, whilemaking the above observation that the shares were sold in an off-market deal, the Hon'ble Tribunal has inadvertently not considered the above documents. As such based on the above records / documents, it is apparent that the Hon'ble Tribunal has inadvertently made an erroneous observation that the shares were sold off-market. Without prejudice to the above, the Appellant had even relied on and furnished a copy of the Judgement of the Hon'ble Tribunal in the case of ACIT vis Shri Ravinder Kumar Toshniwal - ITA No. 5302 I M 108 stating that a particular transaction could not be treated as bogus merely because it is an off-market transaction. As it appears from the order, the said judgement has also not been considered by the Hon'ble Tribunal before making the said observation to treat the transaction as bogus.

iv. After making the abovementioned observations, the Tribunal has further observed that the prices of the shares of Cable Corporation jumped manifold without any apparent reason and there is no economic or financial basis for such astronomical appreciation in a short span of time. In this regard, the Appellant submits that, the shares were sold at the prevailing market price at which the shares were actually traded on the NSE. Copy of the historical price data of Cable Corporation on NSE was also furnished and specifically relied upon at the time of hearing (Ref.pg.33 to 37 of Ex. B) which has inadvertently not beenconsidered by the Hon 'ble Tribunal. It was also stated that Cable Corporation is a reputed company and no investigation had been carried on against it by SEBI or any authority whatsoever, so as to even remotely suggest that the prices were rigged. As such, it is humbly submitted that, even this observation is erroneous in
as much as the astronomical rise in prices was due to the fact that its networth had almost tripled in 2008-09. As such, the said observation is also contrary to the evidences produced and relied on by the Appellant at the time of hearing which have inadvertently skipped the attention of the Hon'ble Tribunal.

v. The Tribunal has while coming to its conc usion relied on the Judgement of the Hon'ble Jurisdictional High Court in the case of Sanjay Bimalchand Jain v/s Pri.CIT. In this regard, it is worth noting that the hearing in the case of the Appellant was concluded on 30.11.2017 whereas the order of the Hon'ble Bombay High Court relied on by the Tribunal was passed on 16.12.2017. The Appellant therefore, did not have any opportunity whatsoever to deal with the said judgement, since the same was not available at the time of hearing nor was the Appellant made aware of the same post the hearing. Without prejudice to the above and in any case, the said judgement is not applicable to the facts of the Appellant's case since the facts in that case are completely different as compared to the case of the Appellant. In that case there was a negative finding as regards the ne worth of the company basis which apprehensions were raised stating that the rise in price of the shares was unbelievable and unjustifiable. Such findings are completely missing in the present case. Further, the Appellant craves leave of the Hon'ble Tribunal to furnish additional points of distinction at the time of hearing of this Miscellaneous Application.

vi. The Appellant further submits that the Hon'ble Tribunal at para 13 of the order has affirmed the observations of the Respondent, that the Assessee (the Applicant herein) had paid cash of equivalent amount and received back by cheque and bogus contract notes and bills for the transactions not actually routed through stock exchange. The Respondent made these observations without any evidence whatsoever. This fact was categorically pointed out to the Tribunal. However, it seems this fact has remained unnoticed at the time of passing the order and the observation of the Respondent has been affirmed without any evidence to support the same.

vii. The Appellant further submits that as apparent from the order, various factual and legal contentions as raised by the

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