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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 15.03.2018
+ ITA 86/2018 and CM APPL.2794-2795/2018
SHRI RAKESH KUMAR GUPTA ..... Appellant
Through Appellant in person.
versus
THE COMMISSIONER OF INCOME TAX -XIII & ANR.
..... Respondents
Through Mr. Zoheb Hossain, Sr. Standing
Counsel with Mr. Deepak Anand, Jr.
Standing Counsel.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE A. K. CHAWLA
HON'BLE MR. JUSTICE S. RAVINDRA BHAT (ORAL)
%
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
authorities.
2. The assessee reported inter alia income from various sources
including substantial capital gains for AY 2010-11. Upon scrutiny, it
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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
(100)
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
question.
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
rc
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