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Surajmull Choteylal Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference No. 265 of 1967 (Review application)
Judge
Reported in[1978]114ITR130(Cal)
ActsCode of Civil Procedure (CPC) , 1908 - Sections 151 and 152 - Order 20, Rule 3 - Order 47, Rule 1; ;Income Tax Act, 1961
AppellantSurajmull Choteylal
RespondentCommissioner of Income-tax
Appellant AdvocateBalai Lal Pal and ;A. Sengupta, Advs.
Respondent AdvocateDebi Pal, Adv.
Cases ReferredK. Ahamad v. Commissioner of Income
Excerpt:
- .....& co. p. ltd. v. commissioner of income-tax : [1975]100itr715(sc) expressed the view that 'actual delivery' in explanation 2 to section 24(1) of the income-tax act meant real as opposed to notional delivery. 'the supreme court was, further, of the opinion that whether a transaction was speculative in the general sense or under the contract act was not relevant for the purpose of this explanation. the definition of delivery in section 2(2) of the sale of goods act which had been held to include both actual and constructive or symbolical delivery had no bearing on the definition of speculative transactions in the explanation, the explanation 2 to the section, the supreme court reiterated, did not invalidate speculative transactions which were otherwise legal but gave a special legal.....
Judgment:

Sabyasachi Mukhakji, J.

1. This is an application for review and reconsideration of an order passed by this court on 27th of June, 1974. The said order was passed in Income-tax Reference No. 265 of 1967. It appeals that in respect of the assessment year 1958-59, there was a reference to this court under Section 66(1) of the Indian Income-tax Act, 1922, on the following two questions :

'(a) Whether, on the facts and in the circumstances of the case, the loss of Rs. 54,934 suffered by the assessee in its transactions in hessian and gunny bags, which were concluded by transfer of P.D.Os. is loss arising from speculative transactions under Explanation 2 to Section 24(1) of the Indian Income-tax Act, 1922 ?

(b) If the question No. 1 is answered in the affirmative, whether, on the facts and in the circumstances of the case, the loss of Rs. 54,934 could be set off against the profit from other business activities of the assessee under Section 10(1) notwithstanding the provisions contained in the first proviso to Section 24(1) of the Indian Income-tax Act, 1922 ?'

2. Following the decision of the Supreme Court in the case of Raghunath Prasad Poddar v. Commissioner of Income-tax : [1973]90ITR140(SC) , we have remanded the case back to the Tribunal for finding out whether actual delivery had been given in respect of delivery orders to the ultimate purchasers. We have further directed the Tribunal to give its finding after giving opportunities to the parties and if necessary after taking additional evidence. Thereafter, on or about 31st of July, 1975, the Supreme Court by its decision in the case of Davenport & Co. P. Ltd. v. Commissioner of Income-tax : [1975]100ITR715(SC) expressed the view that 'actual delivery' in Explanation 2 to Section 24(1) of the Income-tax Act meant real as opposed to notional delivery. 'The Supreme Court was, further, of the opinion that whether a transaction was speculative in the general sense or under the Contract Act was not relevant for the purpose of this Explanation. The definition of delivery in Section 2(2) of the Sale of Goods Act which had been held to include both actual and constructive or symbolical delivery had no bearing on the definition of speculative transactions in the Explanation, The Explanation 2 to the section, the Supreme Court reiterated, did not invalidate speculative transactions which were otherwise legal but gave a special legal meaning to that expression for the purpose of the Income-tax Act only. The Supreme Court further expressed the view that the position of law had been correctly stated in the decision of the Calcutta High Court in the case of D. M. Wadhwana v. Commissioner of Income-tax : [1966]61ITR154(Cal) . In that view of the matter the Supreme Court overruled the view in the case of Raghunath Prasad Poddar : [1973]90ITR140(SC) .

3. In these circumstances, the revenue has made this application asking for an order that the judgment and order in this case dated the 27th June, 1974, passed by us be rectified or modified or reviewed. The question is, is that possible The scope of reconsideration or re-examination by courts is not uncharted. On behalf of the revenue it was stated that the application was made under Section 151 of the Code of Civil Procedure. But to maintain an application under Section 151 of the Code of Civil Procedure it must be on a ground which is not expressly or impliedly prohibited by any other provisions of the Code of Civil Procedure.

4. Order 20, Rule 3, of the Code, provides that the judgment shall be dated and signed by the judge in open court at the time of pronouncing it and when once signed shall not afterwards be altered or added to, save as provided by Section 152 or on review. Section 152 of the Code of Civil Procedure deals with accidental slips or omissions. We are not concerned with that position here. Review is provided for in Order 47, Rule 1, of the Code of Civil Procedure. But in order again to be a valid application under Order 47, Rule 1, it must be in respect of an error or a mistake which was existing at the time of the delivery of the judgment or at the time when the decision was given. A subsequent decision by the court or a subsequent alteration of law is not a ground for review under Order 47. Reliance in this connection may be placed on the observations of the Supreme Court in the case of A. C. Estates v. Serajuddin & Co., : [1966]1SCR235 . There cannot be review of an order which was right when made on the ground of a subsequent decision of the Supreme Court. In the aforesaid view of the matter we are unable to accept the position that this application can be allowed under the provisions of Order 47. The learned advocate for the appellants drew our attention to the observations of the Full Bench of the Kerala High Court in the case of K. Ahamad v. Commissioner of Income-tax : [1974]96ITR29(Ker) and he relied on the observations of the Full Bench at page 34 of the report. There the Full Bench was concerned with certain obvious errors in the judgment. Admittedly, such errors had crept in the judgment and the court held it had power to rectify such errors. The position in the instant case is different.

5. This application is also belated. We gave our decision in June, 1974. The Supreme Court delivered its judgment on 31st of July, 1975, and the notice of motion in respect of the present application was taken out on 1st of July, 1976. In paragraph 20 of the petition it has been stated that the senior authorised representative drew the notice of the Commissioner of Income-tax, West Bengal, on the 16th of January, 1976, to the views of the Tribunal when its attention was drawn to the subsequent decision of the Supreme Court. Even if we accept the position that the subsequent decision of the Supreme Court was brought to the notice of the Tribunal immediately prior to the writing of the letter there is no sufficient explanation as to the steps taken thereafter.

6. For the aforesaid reasons we are of the opinion that the orders asked for cannot be allowed and the application is not maintainable.

7. In the aforesaid view of the matter this application fails and isaccordingly dismissed.

8. There will be no order as to costs.

Janah, J.

9. I agree.


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