HIGH COURT OF BOMBAY
Classic Share & Stock Broking Services Ltd.
Versus
Assistant Commissioner of Income-tax
DR. D.Y. CHANDRACHUD AND A.A. SAYED, JJ.
WRIT PETITION NO. 343 OF 2012
MARCH 7, 2013
ORDER
1. Rule, by consent returnable forthwith. With the consent of the Counsel and at their request, the petition is taken up for hearing and final disposal.
2. This petition relates to the Assessment Year 2001-02. On 31 October 2001 the assessee filed a return of income returning a loss of Rs.16.82 crores which included a loss from share transactions of Rs.13.63 crores (including delivery based loss of Rs.2.67 crores and non-delivery based loss of Rs.10.95 crores). On 30 March 2004 an order of assessment was passed under section 143(3) determining a total loss of Rs.3.13 crores after disallowing inter alia the loss from the share transactions. The Commissioner of Income-tax (Appeals) upheld the disallowance of loss from share transactions by an order dated 8 November 2007. The order of the Appellate Authority was carried in appeal to the Tribunal. The Tribunal by its judgement dated 17 February 2010 set aside the order of the Commissioner of Income-tax (Appeals) and restored the assessment proceedings back to the Assessing Officer for a fresh examination. The order of the Tribunal was on the following basis:-
“6. Considering the voluminous details filed before us supporting the assessee’s claim and on perusal of the orders of the A.O. and the CIT(A), we are of the opinion that the A.O. has disallowed the clams (sic) on certain general principles about the Ketan Parekh group cases and observations of the JPC and SEBI without examining the individual details of the assessee company for the impugned year. In view of this, we are of the opinion that the matter requires re-examination by the A.O. It is also noticed that in the case of Sai Mangal Investrade Ltd. relied upon by the CIT(A) in the order, the Coordinate Bench vide order dated 25.11.2009 has accepted that the transactions are genuine and the loss claimed pertains to valuation of stock at cost or net realisable value and accordingly the grounds of the assessee were allowed. In view of this finding of fact in another group concern, we are of the opinion that the A.O. should examine the nature of the transaction undertaken by the assessee without getting affected/persuaded by the observations of the SEBI and JPC, unless they are applicable to the facts in assessee case. It is also brought to our notice that there was special audit conducted of assessee’s transactions and the report was not placed on record. The A.O. is directed to consider the issues afresh in the light of the facts on record and needless to say that the assessee should be given opportunity before deciding the issues. For this purpose the orders of the A.O. and CIT(A) on this issue are set aside and the assessment is restored back to the A.O. to consider it afresh after examining the facts and according to the law.”
3. Following the order of the Tribunal, the Assessing Officer passed an order on 27 December 2010 under section 254 of the Income-tax Act, 1961 giving effect to the order of the Tribunal. The Assessing Officer re-computed the total loss as follows:-
