Tribunal Rejects Assessee's Appeal on Order Recall citing Mistakes, Emphasizes Expense Apportionment

The Tribunal dismissed the Miscellaneous Application of the assessee seeking to recall the order, citing alleged mistakes in the judgment. The Tribunal emphasized the necessity of determining the profitability of speculation and non-speculation activities separately, rationalizing the apportionment of expenses between the two. It clarified that depreciation should be included in the apportionment of expenses as it is granted for the usage of assets in business operations. The Tribunal held that the alleged mistakes were not apparent from the record and did not warrant a review of its decision.

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Issues:
1. Recalling the order based on alleged mistakes in the judgment.
2. Apportionment of expenses between speculation and non-speculation activities.
3. Treatment of depreciation in the apportionment of expenses.

Analysis:

Issue 1: Recalling the order based on alleged mistakes in the judgment
The assessee sought to recall the order passed by the Tribunal citing mistakes in the judgment. The contentions included the absence of statutory provision for allocation of composite expenses towards speculation activities, and the assertion that the scope of Explanation to section 73 is limited to the purchase and sale of shares only. The Tribunal acknowledged the composite business of the assessee involving both derivative trading and share trading. It emphasized the necessity to determine the profitability of speculation and non-speculation activities separately. The Tribunal rationalized the apportionment of expenses between the two activities, dismissing the contentions raised by the assessee regarding the applicability of certain decisions. The Tribunal held that maintaining a consolidated profit and loss account did not absolve the assessee from separately determining the profitability of each activity.

Issue 2: Apportionment of expenses between speculation and non-speculation activities
The Tribunal considered the business activities of the assessee involving the purchase and sale of shares as speculative transactions. It clarified that the Exception provided in Explanation to Section 73 applied only from 01/04/2015 onwards. Until A.Y. 2015-16, the profitability of speculative and non-speculative activities had to be determined independently. The Tribunal conducted a fair and rational apportionment of expenses between the two types of activities, emphasizing the need for separate calculations for each claim.

Issue 3: Treatment of depreciation in the apportionment of expenses
The assessee contended that depreciation should not be included in the apportionment of expenses as it is an allowance, not an expenditure. However, the Tribunal rejected this argument, stating that depreciation is granted for the usage of assets in business operations. The Tribunal noted the absence of evidence regarding the specific assets used for speculation activities. As a result, the Tribunal included depreciation in the total expenditure for apportionment between speculation and non-speculation activities. The Tribunal dismissed the argument that depreciation is merely an allowance and not an expenditure, emphasizing the factual context of the case.

In conclusion, the Tribunal dismissed the Miscellaneous Application of the assessee, stating that the alleged mistakes did not fall under the ambit of a mistake apparent from the record. The issues raised were considered debatable and did not warrant a review of the Tribunal's decision under the relevant provisions of the Act.

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