Judgment:
ORDER
SHEET GA No.3423 of 2013 ITAT No.190 of 2013 ITA No.…… of 2013 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION ORIGINAL SIDE THE COMMISSIONER OF INCOME TAX, KOLKATA-I Versus M/S TECK CONSULTANCY SERVICES PVT LTD BEFORE: The Hon'ble JUSTICE GIRISH CHANDRA GUPTA The Hon'ble JUSTICE TAPASH MOOKHERJEE Date : 14th February, 2014.
Appearance: Mr.O.P.Dubey, Adv.Mr.J.P.Khaitan, Sr.Adv.Mr.Pranit Bag, Adv.The Court :- The subject matter of challenge in this appeal is a judgement and order dated May 16, 2013 by which the learned Tribunal allowed the appeal of the assessee against an order dated March 13, 2012 passed by the CIT in exercise of power under Section 263 of the Income Tax Act, 1961.
The CIT came to the conclusions that Exception-2 appearing from Explanation to Section 73 was not applicable to the assessee and, therefore, the loss of a sum of Rs.14,76,318/- should have been deemed to be a speculation loss and could not have been allowed to be set off against the income arising out of interest to the extent of a sum of Rs.17,07,017.
It is on this basis he opined that the assessment order under Section 143(3) of the I.T.Act passed by the Assessing Officer was erroneous and prejudicial to the interest of the revenue.
He naturally passed the consequential ordeRs.Aggrieved by the order of C.I.T.the assessee preferred an appeal.
The learned Tribunal in disposing of the appeal held that the case of the assessee came within the four corners of the second exception appearing in explanation to Section 73 of the Income Tax Act.
Mr.Khaitan, learned Senior Advocate appearing for the assessee submitted that the plain arithmetic appearing from the order of the CIT is that the company invested a sum of Rs.3,94,26,232/- in the business of loans and advances whereas the assessee purchased shares of Rs.2,72,29,429.72 P.
He submitted that on a comparison of these two figures it would appear that the principal business of the company was to make investment in loans and advances and, therefore, Exception-2 appearing from the explanation was squarely applicable to the case of the assessee.
Mr.Dubey, learned Advocate appearing for the revenue-appellant submitted that the total shareholders funds available to the assessee is Rs.20,65,10,802/- as would appear from the order of the CIT.
It would appear from the order of the learned Tribunal rest shares.
The loss of a sum of Rs.14,76,318/-was also incurred from that the out of loss in shares.
of the funds are invested in He submitted that the learned Tribunal which was a final Court of facts did not undertake any exercise to find out the money invested in the shares and the money invested for the purpose of incurring the aforesaid loss nor is there any finding that they were separate in the sense that some portion of it was for investment and some portion of it was for business.
That type of segregation was not even attempted by the learned Tribunal.
the Without undertaking this exercise, it was not open to learned Tribunal to arrive at expressed by the CIT were incorrect.
an opinion that the views Therefore, according to him, the learned Tribunal passed the order in favour of the assessee without applying mind.
We have considered the rival submissions advanced by the learned advocates and are of the opinion that the submissions made by Mr.Dubey are not without substance, in that the learned Tribunal did not undertake any exercise to scrutinize the facts and circumstances of the case.
To that extent, the order was indeed passed without application of mind.
We are, as such, of the opinion that the order cannot be sustained and is, therefore, set aside.
The purpose matter of is remanded rehearing and to the learned examination of Tribunal all the for the facts and circumstances and in the light thereof to consider whether any of the exceptions is applicable to the assessee.
(GIRISH CHANDRA GUPTA, J.) (TAPASH MOOKHERJEE, J.) cs.