CIT, PATIALA vs. M/S VARREN FINANCIAL SERVICES LTD. PATIALA

ITA/569/2009HC Punjab & HaryanaPHHC01084690200913 November 2009Author: MR. JUSTICE GURDEV SINGH,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What were the facts?

The appeal was filed by the Commissioner of Income Tax (Revenue) against an order of the Income Tax Appellate Tribunal (ITAT) for assessment year 1998-99. The assessee, M/s Varren Financial Services Ltd., claimed business and speculation loss from share trading. The Assessing Officer (AO) rejected the claim and made a best judgment assessment, using a rate of Rs. 92.90 per share. The Commissioner of Income Tax (Appeals) [CIT(A)] partly allowed the appeal, reducing the rate to Rs. 88 per share. The ITAT upheld the CIT(A)'s decision, finding no infirmity in the order.

What did the High Court hold?

The High Court held that the matter was clearly in the realm of appreciation of evidence and no substantial question of law arose. The Tribunal had provided reasons for accepting the CIT(A)'s view. The Tribunal's reasoning was that while there was a point that the assessee sold at a lower rate when the price was between Rs. 88 and Rs. 99.90, it agreed with the CIT(A)'s conclusion of taking the actual sale at Rs. 88 per share, which was the lowest quoted rate, and noted that no brokerage was paid. Therefore, the Tribunal found no infirmity in the impugned order. The appeal was dismissed on the grounds that it did not involve a substantial question of law.

What were the issues?

1. Whether, in the facts and circumstances, the ITAT was justified in accepting Rs. 88 per share as the trading rate, which was the minimum traded rate, while ignoring the highest traded rate of Rs. 92.90 per share, and considering the assessee's failure to substantiate the actual trading rate (which was within its exclusive knowledge)? (Question of law and fact, concerning Section 114 of the Indian Evidence Act). 2. Whether, in the facts and circumstances, the ITAT was justified in not granting the benefit of Section 114 of the Indian Evidence Act to the Revenue by applying the highest traded rate of the shares? 3. Whether, in the facts and circumstances, the ITAT was justified in not disposing of, by passing a speaking order, the specific ground raised by the Revenue regarding the CIT(A)'s failure to invoke Section 114 of the Indian Evidence Act and apply the highest traded rate? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The CIT(A) and the Tribunal should have assessed the rate at Rs. 92.90 per share. The ITAT should have applied Section 114 of the Indian Evidence Act and considered the highest traded rate.

Which sections of the Income-tax Act were involved?

Section 260A,Section 114

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.569 of 2009 (O&M) Date of decision: 13.11.2009 The Commissioner of Income Tax. -----Appellant Vs. M/s Varren Financial Services Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present:- Ms. Urvashi Dhugga, Standing Counsel for the revenue. -----

ORDER:

1.

This appeal has been preferred by revenue under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 25.3.2009 of the Income Tax Appellate Tribunal, Chandigarh Bench ‘A’ in I.T.A. No.763/Chd/2008 for the assessment year 1998-99, proposing to raise following substantial questions of law:- “(i) Whether in the facts and circumstances of the case, the ITAT was justified in taking the rate of Rs.88 per share i.e. the minimum at which the said shares were traded on that day, ignoring the fact that the said shares had been traded at the highest rate of Rs.92.90 per share and that ITA No.569 of 2009 the assessee had failed to substantiate the rate at which the shares were actually traded, which fact was in its exclusive knowledge. (ii) Whether in the facts and circumstances of the case

The order continues below.

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