High Court Of Gujarat
Affection Investments Ltd. vs. Assistant Commissioner Of Income Tax
Section 48, 55(2), 254(1)
Asst. Year 1993-94
D.A. Mehta & S.R. Brahmbhatt, JJ.
Tax Appeal Nos. 170, 171 & 173 of 2003
16th February, 2009
Counsel appeared :
J.P. Shah with Manish J. Shah, for the Appellant : Manish R. Bhatt with Mrs. Mauna M. Bhatt, for the Respondent
JUDGMENT
D.A. MEHTA, J. :
In all the four appeals by a common order dt. 25th June, 2003, following common questions have been formulated by this Court at the time of admission :
“1. Whether the Tribunal has rightly applied the principles of finding out the cost of right shares laid down by the Supreme Court in the decision of Miss Dhun Dadabhoy Kapadia vs. CIT (1967) 63 ITR 651 (SC) ?
2. Whether the Tribunal should have referred the matter to the Special Bench in accordance with the law laid down by Gujarat High Court in Sayaji Iron & Engg. Co. vs. CIT (2002) 172 CTR (Guj) 339 : (2002) 253 ITR 749 (Guj) and whether its decision is bad and deserves to be quashed for the reason that the matter was not referred to the Special Bench.?” All the four appeals are taken up for hearing and disposal together as they arise out of common order of the Tribunal dt. 19th Feb., 2003 [reported as Asstt. CIT vs. Affection Investments Ltd. (2003) 80 TTJ (Ahd) 278—Ed.] Heard learned counsel appearing for the respective parties. In relation to question No. 1, it is common ground between the parties that the controversy now stands answered by judgment rendered today in case of Asstt. CIT vs. Amazon Investments Ltd. in Tax Appeal No. 556 of 1999 [reported as Asstt. CIT vs. Acropolish Investments Ltd. & Ors. (2009) 222 CTR (Guj) 383—Ed.]. Hence, it is not necessary to set out facts and contentions in detail. Question No. 1 is therefore answered in ‘negative’. The Tribunal was in error in reading and applying the apex Court decision in case of Miss Dhun Dadabhoy Kapadia vs. CIT (1967) 63 ITR 651 (SC) in the manner it did so as to hold that the renunciation of entitlements to the rights to subscribe to convertible debenture/shares will not permit computation of short-term capital loss as claimed by the assessee. Insofar as the second question is concerned, the Tribunal has misdirected itself in law. In para No. 11 of the impugned order, the Tribunal has recorded that it is true that the facts relating to the case of Amazon Investments Ltd. in ITA No. 3610/Ahd/1997 dt. 20th April, 1999 and in the Case No. 3704/Ahd/1997 and others dt. 17th Aug., 1999 decided by the Tribunal are absolutely identical. Thereafter, the Tribunal has gone on to take a different view in relation to the present four cases for various reasons stated in the impugned order.
The law is well settled on this subject. As laid down by this Court in case of Sayaji Iron & Engg. Co. vs. CIT (2002) 172 CTR (Guj) 339 : (2002) 253 ITR 749 (Guj), once the Tribunal had come to the conclusion that the fact situation was identical, to the one obtaining in a decided matter, no Coordinate Bench of the Tribunal has any right or jurisdiction to record a contrary decision, entirely contrary to the one reached by another Co-ordinate Bench of the same Tribunal on same set of facts and circumstances. Mere difference in the Members manning the Tribunal does not vest the subsequent Bench with such power. The principle is based on judicial propriety and the confidence which the litigating public has in judicial hierarchy and the institution. The only course, that is open to the subsequent Co-ordinate Bench, would be to make a reference to the President of the Tribunal as provided in s. 255(3) of the IT Act, 1961 (‘the Act’) to constitute a Special Bench to resolve the controversy. The reasons given in the impugned order by the Bench of the Tribunal for not making a reference to the President under provisions of s. 255(3) of the Act, are, to say the least, not germane and on such specious reasons a Co-ordinate Bench could not have taken a different view of the matter. The second question stands answered accordingly. In the facts and circumstances of the case, the impugned order dt. 19th Feb., 2003 is bad in law and the decision on merits cannot be sustained. The appeals are accordingly allowed in the aforesaid terms with no order as to costs.
[Citation : 326 ITR 255]
