PRINCIPAL COMMISSIONER OF INCOME TAX-1 vs. M/S ROYAL JEWELLERS

127

I Pr. Commissi

M/s Adinath Enterprises LL

CORAM: H

Present M

SANJEEV P 1.

T ITAT for the assessee. 2.

L account of r considering th 3.

B its return of capital loss du and General M that capital lo of M/s Var Rs.9,87,485/- 1961 (for sho IN THE HIGH COURT OF PUN AT CHANDIGA I D oner of Income Tax-1 Ludhiana Vs. h Investment & Training Co LP), Ludhiana

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Ranvijay Singh, Sr. Standing ***

RAKASH SHARMA, J.(Oral) The revenue challenges order d e assessment year 1993-1994, a Learned counsel submits that reduction of the share price a he notional net business loss. Briefly the facts of the case are income in the status of Investm ue to fall in value of equity sha Mills Limited, amounting to Rs. oss on account of sale of non-co rdhman Spinning and Gener and also claimed exemption un ort ‘the Act, 1961’) of an amoun NJAB AND HARYANA ARH ITA-81-2024 (O&M) Date of Decision: 23.07.2024

…Appellant . (Now known as Adishwar

…Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH g Counsel for the appellant.

) dated 12.10.2023, passed by the llowing the appeal filed by the there was no actual loss on and the Tribunal has erred in that the assessee-company filed ment Company. It has claimed ares of M/s Vardhman Spinning 1,94,54,400/-. It is also claimed onvertible portion of debentures ral Mills Ltd. amounting to nder Section 10 (2A) of the Act, nt of Rs.75,936/- from share of

r e e n n d d g d s o , f RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-81-2024

income from Rs.2,04,41,88 head ‘capital g 4.

T referred to the a notional los capital loss o short term cap to the fall of v aside the orde 5.

T vide its order that the incom was accessib profession’. T therefore, rem 6.

T ‘income from actual transfe notional loss allowed to be 7.

T dated 19.02.2 was taken up

2 (O&M)

m M/s Adinath Syndicate. Th 85/- was claimed to be carried fo gain’. The Assessing Officer durin e assessment order of 1995-1996 ss and disallowed the claim of th of Rs.2,04,41,885/-. The CIT (A pital loss of Rs.9,87,485/- and al value in the shares and thus vid er of the AO. The order of CIT (Appeals) was dated 15.05.2006, set aside the o me set off derived by the assesse ble as income under the hea The assessee was held to be a dea manded back to the AO. The AO held that the gain or los m business or profession’ will ari er of shares and since there ha due to fall in value of the equ carried forward. The appeal was again preferred 2016, dismissed the appeal of th before the ITAT. hus, total loss amounting to orward to the next year under the ng re-assessment proceedings 6, wherein it was held to be only he assessee for carry forward of Appeals), ultimately allowed the lso the claim of the loss relating de its order dated 03.03.2003 set s taken before the Tribunal who order of CIT (Appeals) and held ee under the head “capital gain’ ad ‘income from business or aler in share and the matter was, ss that will arise under the head se only where there has been an as not been any transfer, just a uity shares, the same cannot be to CIT (A) who vide its order he assessee, whereafter, the case

o e s y f e g t o d

r , d n a e r e RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-81-2024

T by the Hon’b vs. CIT 1967 “ d m r b b a s a r r a

I 413 (Bombay " n C t o o c

3 (O&M)

The ITAT examined the matter le Supreme Court in the case of (63) ITR 651 (SC), wherein, it w “"A concomitant of the acquisi depreciation in the 'value of the may, in a commercial sense, be right which she subsequently tra by her would, therefore, be repr between the money realised on amount which she lost in the form shares in order to acquire that r also, it is clear that the net c represented by the amount reali right to receive new shares, amount of depreciation in the val It also relied on the case of CIT y), wherein, it was held as under: "We had pointed out to Mr. Josh not only similar, but identical, Court in Dhun Kapadia's case. M o distinguish our case from the our opinion, he could not point o of the distinctions he sought to case was a case of capital gains in the light of judgment passed f Miss Dhun Dadabhoi Kapadia was held as under:- ition of the new right was the old shares, and the depreciation e deemed to be the value of the ansferred. The capital gain made resented only by the difference n transfer of the right, and the m of depreciation of her original right. Looked at in this manner capital gain by her would be ised by her on transferring the after deducting therefrom the lue of her original shares" T vs. K.A. Patch (1971) 81 ITR - hi that the facts of our case were , to those before the Supreme Mr. Joshi made various attempts e case of Dhun Kapadia; but, in out any effective distinction: One make was that Dhun Kapadia's whereas the case before us is of

d a e n e e e e l r e e e R e e s n e s f RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-81-2024

b d b d c c t i t t n W t C p p 10.

I the CIT (A) a of Rs.1,94,54 11.

W the market qu issue on 13.1 share and the share, resultin

4 (O&M)

business profits. Now, in our o does exist, but it makes no diff both capital gins and revenue pro deducting the cost price form th capital gains the excess is a gai case of business profits, the exce he less, basically, both are profit s capital gain or business profit m he rate of tax and the actual amo hat reason, but the method of ca not very and is the same. We do not see any distinction wh he facts in the case before us Court in Dhun Kapadia's case. W principles laid down by the Sup propose to decide this reference o It therefore set aside the order of and directed the AO to allow the ,400/- to subsequent years. We find that the fall in the value uotation in Ludhiana Stock Exch 10.1992, last-cum-right price of first Ex.-right price of the share ng in fall in the price of the sh opinion, it is a distinction which fference, because in the case of ofit the amount is ascertained by he sale proceeds. In the case of in in the capital, whereas in the ess is a revenue profit, but none ts. Of course, the fact whether it merely affects the incidence and ount of tax may vary because of lculating the actual amount does hich makes a difference between and those before the Supreme We are, therefore, bound by the reme Court in that case and we on the basis of those principles". f the AO and the order passed by e carry forward of business loss e has been worked out based on hange, wherein prior to the right f the shares were Rs.610/- per on 11.11.1992 was Rs.400/- per are by Rs.210/- per share. This

h f y f e e t d f s n e e e

y s n t r r s RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-81-2024

aspect has n judgments pa have been fo (2006) 280 IT assessee. 12.

K and no substa Court, the app 13.

23.07.2024 rajesh 1 2

5 (O&M)

not been disputed by the reven assed by the Hon’ble Supreme C ollowed by this Court in the ca TR 608, wherein identical issue Keeping in view that the questio antial question of law arises fo peal is dismissed. All pending misc. application(s)

(SANJ

nue. We further find that the Court and Bombay High Court ase of Naveen Jindal vs. ACIT e was decided in favour of the on of law stand already decided or fresh adjudication before this also stand disposed of. JEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE : Yes/No : Yes/No

e t T e d s RAJESH KUMAR 2024.07.29 12:21 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.