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TAXAP/148420/2006 2/ 6 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1484 of 2006
For
Approval and Signature:
HONOURABLE
MR.JUSTICE K.A.PUJ Sd/-
HONOURABLE
MR.JUSTICE BANKIM.N.MEHTA
Sd/-
====================================
1.
Whether
Reporters of Local Papers may be allowed to see the judgment ?
YES
2.
To
be referred to the Reporter or not ?
NO
3.
Whether
their Lordships wish to see the fair copy of the judgment ?
NO
4.
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
NO
5.
Whether
it is to be circulated to the civil judge ?
NO
====================================
COMMISSIONER
OF INCOME TAX - Appellant
Versus
CHANDULAL
ALIAS VALLABHDAS DAMJI - Opponent
====================================
Appearance :
MRS
MAUNA M BHATT for Appellant.
MR MANISH J SHAH for
Opponent.
====================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE BANKIM.N.MEHTA
Date
: 05/08/2008
ORAL JUDGMENT
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
The
revenue has filed this Tax Appeal under Section 260A of the
Income-tax Act, 1961 for A.Y. 1997 98 proposing to formulate the
following substantial questions of law for the consideration and
determination of this Court:-
Whether
the Appellate Tribunal is right in law and on facts in dismissing
the appeal filed by the revenue on the ground of low tax effect ?
Whether
on facts and circumstances of the case, the Appellate Tribunal was
right in law in confirming the order of the CIT (A) holding that the
addition of Rs.1,38,422/- made on account of short term capital
gains by resorting to rectification of the order under Section 154
of the Act was invalid ?
This
Court has admitted the Tax Appeal on 24.07.2007 in terms of the
above referred substantial questions of law.
This
appeal was heard by us along with other cognate matters.
Submissions were made by both the sides. So far as Question (A) is
concerned, we have passed a detailed order in Tax Appeal No.1402 to
1405 of 2007. We have decided the said tax appeal and the question
paused therein was answered in affirmative i.e. in favour of the
assessee and against the revenue. For the reasons stated and
conclusion drawn therein, we answer Question (A) in affirmative i.e.
in favour of the assessee and against the revenue.
So
far as Question (B) is concerned, the assessment was framed under
Section 143(3) r.w.s. 147 of the Act. Thereafter, on account of
revenue audit, an objection was raised that the Assessing Officer
has disallowed and added claim of Rs.1,93,983/- and again allowed
short term capital gain offered by the assessee under Section 50 of
the Act to the tune of Rs.1,38,422/-. On this basis, the Assessing
Officer passed an order of rectification under Section 154 of the
Act. The Commissioner of Income-tax (Appeals) held that there is no
case of double benefit of set-off and hence, there is no mistake
which required rectification. On further appeal, the appellate
Tribunal upheld the said order. It is contended on behalf of the
revenue that the Appellate Tribunal has overlooked that there was
granting of dual benefit which was an error apparent on the record.
The same could be rectified under Section 154 of the Act. The
Appellate Tribunal has, therefore, erred in holding that there is no
error by overlooking vital aspects of the claim made by the assessee
with regard to the reduction of WDV of block of assets on sale of
two trucks. In this view of the matter, the Question (B) was
proposed to be formulated by the revenue.
We
have considered the submissions made on behalf of the revenue and
also gone through the orders passed by the authorities below. The
CIT (Appeals) has categorically held in his order that the Assessing
Officer has not appreciated the contents of the assessment order and
has proceeded to invoke the provisions under Section 154 in an
arbitrary manner. There is no case of double benefit of set off of
capital gains as pointed out by the Assessing Officer. The CIT
(Appeal), therefore, took the view that there was no mistake which
needs rectification. He, therefore, cancelled the order passed by
the Assessing Officer under Section 154 of the Act. The Tribunal
has also observed in its order that it was clearly mentioned in the
assessment order that in the assessment proceedings, the assessee
agreed disallowance on appreciation on trucks and claimed for
reducing the income offered of Rs.1,38,422/- as a short term capital
gain under Section 50 of the Act. The Tribunal has further observed
that the Assessing Officer has not appreciated the contents of the
assessment order and has proceeded to invoke the proceedings of
Section 154 in an arbitrary manner. The Tribunal has also given
its finding that there is no case of double benefit of set off of
capital gains as pointed out by the Assessing Officer. Since there
was no mistake apparent on the face of the record, the Tribunal has
confirmed the order of the learned CIT (Appeal) whereby the order
passed by the Assessing Officer under Section 154 of the Act was
cancelled. We are, therefore, of the view that the Tribunal was
right in confirming the order of CIT (Appeal) holding that the
addition of Rs.1,38,422/- made on account of short term capital
gains by resorting to rectification of the order under Section 154
of the Act was invalid. Question (B) is, therefore, answered in
affirmative i.e. in favour of the assessee and against the revenue.
This
Tax Appeal is accordingly disposed of without any order as to costs.
Sd/- Sd/-
[K. A. PUJ, J.] [B.
N. MEHTA, J.]
Savariya
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