Law:

Section:

Section 43(5) of the Income-tax Act, 1961 [Corresponding to section 24(1) of the Indian Income-tax Act, 1922] – Speculative transactions – Assessment year 1958-59 –A reference under Act was made to High Court on question as to whether loss arising to assessee in its transaction was from speculative transaction and whether said loss could be set-off against profit from other business – Following decision of Supreme Court, High Court remanded matter to Tribunal for finding out some facts – Said decision on which High Court relied upon was overruled by Supreme Court by a subsequent decision – Revenue filed application for review of order of High Court in light of said subsequent decision of Supreme Court – Whether an application for review of judgment or order of Court must be in respect of error or mistake which was existing at time when decision was given and subsequent decision by Court or subsequent alteration of law is not ground for review - Held, yes – Whether, therefore, application in question was liable to be dismissed – Held, yes FACTS A reference to High Court was made on the question as to whether, loss suffered by assessee in its transactions in hessian and gunny bags, which were concluded by transfer of P.D.Os. was loss arising from speculative transactions and whether said loss could be set off against profit from other business. Following the decision of the Supreme Court in the case of Raghunath Prasad Poddar v. CIT [1973]90 ITR 140 , the High Court 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. The said decision of the Supreme Court was subsequently reversed in Davenport & Co. P. Ltd. v. CIT [1975] 100 ITR 715. In these circumstances, the revenue made instant review application for an order that the judgment and order passed by the High Court be rectified or modified or reviewed. HELD In order to be a valid application under Order XLVII, rule 1 of the Code of Civil Procedure, 1908; 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…

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