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Shri Rakesh Kumar Gupta Vs. The Commissioner Of Income Tax-Xiii & Anr.
June, 11th 2018

                                          Date of decision: 15.03.2018

+     ITA 86/2018 and CM APPL.2794-2795/2018

      SHRI RAKESH KUMAR GUPTA                 ..... Appellant
                   Through Appellant in person.


                                              ..... Respondents
                   Through  Mr. Zoheb Hossain, Sr. Standing
                            Counsel with Mr. Deepak Anand, Jr.
                            Standing Counsel.


      1.      The question of law sought to be urged as whether the
      assessee's claim of Short Term Capital Gain of ` 37,11,501/- sought
      to be set off against Short Term Capital Loss of `45,60,673/- in the
      preceding year was unjustifiably denied by the lower appellate

      2.      The assessee reported inter alia income from various sources
      including substantial capital gains for AY 2010-11. Upon scrutiny, it

      ITA 86/2018                                                 Page 1 of 5
was urged on its behalf that substantial purchases of shares were not
based upon delivery but the gains/losses were on the basis of daily
transactions. It is submitted that as far as the gains were concerned,
the assessee reported such income on the basis of capital gains in its
investment portfolio. The Assessing Officer (AO) rejected the
assesee's contentions and characterised the sum/income reported as
business income towards capital gains and capital loss. In doing so,
the AO took note of the detailed transactions that the assesee had
entered into including the volume of shares traded, the duration held,
the dividends earned etc.        He also considered the assessee's
submission that separate portfolios for business and investment were
maintained. The AO's findings were confirmed by the CIT(A), who
too independently analysed the facts and concluded that the income
reported had to be characterised as business income.

3.      The assessee's appeal to the ITAT was unsuccessful; the
Tribunal reasoned as follows :

        "7. After hearing both the parties and perusing the materials
        available on record and the orders of the authorities below, we
        find that during the year,the assessee has purchased and sold
        the shares of Rs.22.03 crores and odd and Rs.24.12 crores and
        odd respectively. Some of the shares of Axis Bank were
        purchased in the previous year, out of which some were sold
        and balance has been shown as on 31.03.2009. On examination
        of the tables reproduced above, we observe that the assessee
        has made purchase of shares 57 times and sale of shares 59
        times. There are several instances when the assessee has
        purchased the shares and sold them either the same day or after

ITA 86/2018                                                   Page 2 of 5
        a few days. In most of the cases, the assessee has done intraday
        transactions. From the balance sheet filed by the assessee for
        the impugned year placed at paper book page-33, we find that
        the shares held by the assessee are reflected as under :
          SI No.   Name of the Company               Value as on   Value as on
                                                       31.03.09      31.03.10

          1        Abhishek Ind. (100)                     1000          1000

          2        Bhageerath Engg. (100)                  1000          1000

          3        CCAP Ltd. (100)                         1000          1000

          4        Shoppers Inv. & Finance Ltd.            1000          1000

          5        Videocon International (8)              1000          1000

          6        Other Shares-Singhal Fincap         35243.30      35243.30

          7        Others Shares ­ K.K.Securities   17162647.84             0

        From the above part of the balance sheet, it is clear that there is
        no change in the shares of some companies, which remained as
        it is in F.Y. 31.03.2009 and 31.03.2010. In case of other shares
        ­ K.K. Securities, the assessee had value of shares at
        Rs.1,71,62,647 /- as on 31.03.2009 but up to the impugned year,
        the assessee has sold all the shares. On perusal of the
        computation filed by the assessee and the capital account, the
        assessee has not received any dividend during the year. The
        assessee has received only dividend of Rs.350/- in F.Y.
        31.03.2009. In view of the characteristics of share transactions
        undertaken by the assessee, we do not find any justification to
        discard the findings reached by the authorities below on this
        issue ..............."

ITA 86/2018                                                             Page 3 of 5
4.      The petitioner, who represents himself, firstly urges that the
findings of the lower appellate authorities are facially in error of law
because they overlooked the circumstance that for the past years
similar transactions were accepted as capital gain. There being no
challenge in the nature of the transactions, assessee could not have
been subjected to different treatment for the assessment year in

5.      Secondly, it was urged that the AO's over-emphasis on the
duration of holding also overlooked a significant fact that the appellant
in fact did not take delivery of the shares and a majority of them, were
transacted during the day. As far as the others that were reported as
capital investments, the assessee maintained separate books which
meant that his intention was to segregate the investments from the
other transactions. The assessee sought to rely upon the decision of
the Bombay High Court in Commissioner of Income Tax vs. Gopal
Purohit, (2010)188 Taxman 140 (Bom).

6.      It is apparent from the above factual narrative that the Revenue
authorities - including the CIT(A) and the ITAT carried out a detailed
analysis of the transactions in question including the volume of
holding, duration of holding and the dividend earned and other
essential details. The lower authorities-including the AO considered
the cumulative effect of these factors and also all the relevant
authorities, starting from the judgment of the Supreme Court in Raja
Bahadur Visheshwara Singh vs. Commissioner of Income Tax, (1961)
41 ITR 685 (SC). In this background the assesse's assertion that the

ITA 86/2018                                                     Page 4 of 5
previous year's assessment-which had accepted the reporting of the
transaction which he claims to be identical, is unpersuasive. The
previous year's assessment order (for AY 2008-09) in fact did not lead
any discussion on this aspect and appear to have merely accepted the
assessee's contention. Those cannot by any stretch of imagination be
conclusive. At any rate in such cases, one cannot apply the principle
of res judicata or estoppel.

7.      For these reasons, the Court is of the opinion that no substantial
question of law arises. What is urged related to pure appreciation of
facts. The appeal is therefore dismissed. All the pending applications
also stand disposed of.

                                              S. RAVINDRA BHAT, J

                                                     A. K. CHAWLA, J
MARCH 15, 2018

ITA 86/2018                                                      Page 5 of 5
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