SANJAY GUPTA HUF, MUMBAI V. ACIT RG 19(1), MUMBAI

ITA 8835/MUM/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2325 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 30-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 16-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAILASH GAIKWAD
• Keywords: Business income; Depreciation; Source of fund

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E B ENCH, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER / I .TA NO.6589/MUM/2010 ( / ASSESSMENT YEAR:2006-07) / I .TA NO.8835/MUM/2010 ( / ASSESSMENT YEAR:2007-08) / I .TA NO.6393/MUM/2012 ( / ASSESSMENT YEAR:2008-09) M/S. SANJAY K. GUPTA(HUF) FLAT NO.6, LOTIYA MAHAL, PLOT NO.393, 14 TH ROAD, KHAR (W), MUMBAI - 400052 / VS. ACIT RG.19(1) MUMBAI ./ ./ PAN/GIR NO. AAHHS 0223C ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: NONE / RESPONDENT BY: SHRI . KAILASH GAIKWAD / DATE OF HEARING :13.07.2016 ! / DATE OF PRONOUNCEMENT :29.07.2016 / O R D E R PER C.N. PRASAD, JM: ALL THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-30, MUMBAI PERTAINING TO ASSESSMENT YEARS 2006-07, 2007-08 & 2008-09. SANJAY K. GUPTA 2 2. NONE APPEARED ON BEHALF OF THE ASSESSEE THOUGH T HE AUTHORIZED REPRESENTATIVE NOTED THE DATE OF HEARING WHEN THE M ATTER WAS ADJOURNED FROM 17.05.2016 TO 13.07.2016. SINCE THE SE APPEALS ARE OLD APPEALS, WE ARE INCLINED TO DISPOSE OF THESE MA TTERS ON HEARING THE LD. DEPARTMENTAL REPRESENTATIVE ON MERITS. ITA NO.6589/MUM/2010:- 3. THE ASSESSEE RAISED THE FOLLOWING EFFECTIVE GROU NDS:- 1 THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN PASSING THE APPELLATE ORDER, WHICH IS INVALID AND BAD IN LAW. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ASSESSMENT OF RS.64,58,647/- DECLARED BY THE AP PELLANT UNDER THE HEAD SHORT TERM CAPITAL GAIN AS INCOME FROM BUSINESS. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN SUSTAINING THE DISALLOWANCE OF A SUM OF RS.5,44,455/- U/S.14A OF THE ACT. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONCURRING WITH THE DISALLOWANCE OF RS.10,000/- OUT OF RS.50,0 00/- CLAIMED BY THE APPELLANT AS DEPRECIATION ON MOTOR CAR. 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN APPROVING THE DISALLOWANCE OF RS.7,161/- OUT OF TELEPHONE EXP ENSES OF RS.35,807/- CLAIMED BY THE APPELLANT. 6. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN SUMMARILY REJECTING THE GROUND RAISED AGAINST LEVY OF INTERES T U/S.234A, 234B, 234C AND 234D OF THE ACT. 4. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT T REATED THE INCOME FROM SALE OF SHARES AS INCOME FROM BUSINESS OF THE ASSESSEE AS AGAINST THE CONTENTION OF THE ASSESSEE THAT THE SAME SHOULD BE ASSESSABLE UNDER THE HEAD CAPITAL GAINS. THE LD. D EPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSING OFFICER A FTER CONSIDERING SANJAY K. GUPTA 3 VARIOUS ASPECTS VIZ., MAGNITUDE OF PURCHASE AND SAL E OF SHARES, DIVIDEND INCOME RECEIVED, MARKETABILITY OF SHARES, SOURCE OF FUNDS FOR ACQUIRING SHARES, TREATMENT OF SHARES ON THEIR SALE ACCOUNTS, MOTIVES FOR THE PURCHASE AND SALE OF SHARES ETC., H ELD THAT THESE TRANSACTIONS ARE CARRIED OUT BY THE ASSESSEE IN PU RCHASE AND SALE OF SHARES ARE NOTHING BUT BUSINESS INCOME AND SHOULD B E ASSESSED AS SUCH. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THIS VIEW OF THE ASSESSING OFFICER IS UPHELD BY THE CIT(A). 5. COMING TO THE DISALLOWANCE MADE U/S.14A, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESS EE EARNED DIVIDEND INCOME OF RS.1,29,212/- AND HE HAS NOT MAD E ANY DISALLOWANCE TOWARDS EXPENSES FOR EARNING SUCH DIV IDEND INCOME. THE ASSESSING OFFICER DISALLOWED RS. 4,95,796/- TOW ARDS INTEREST AND RS. 48,659/- BEING 0.5% OF AVERAGE VALUE OF INVESTM ENT U/S.14A READ WITH RULE 8D. DR SUBMITS THAT THE LD. CIT(A) SUST AINED SUCH DISALLOWANCE. 6. COMING TO DISALLOWANCE OF DEPRECATION ON MOTOR CAR AND TELEPHONE EXPRESSES, HE SUBMITS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENTS MADE DISALLOWANCE OF DEP RECIATION ON MOTOR CAR OF RS. 10,000/- OUT OF RS. 50,000/- CLAIM ED AND TELEPHONE EXPENSES OF RS.7,161/- OUT OF RS. 35,807/- HE SUBMI TS THAT THE ASSESSING OFFICER DISALLOWED 20% OF THESE EXPENSES TREATING THEM FOR PERSONAL USE. THE LD. CIT(A) SUSTAINED THE SAID D ISALLOWANCES. 7. ON GOING THROUGH THE ORDERS OF THE AUTHORITIES B ELOW AND TAKING INTO CONSIDERATION THE SUBMISSION OF THE LE ARNED DR, WE FIND SANJAY K. GUPTA 4 NO INFIRMITY IN THE ORDER PASSED BY THE CIT(A). A PPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 8835/MUM/2010(2007-08):- 8. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS:- 1 THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN PASSING THE APPELLATE ORDER, WHICH IS INVALID AND BAD IN LAW. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ASSESSMENT OF RS.60,09,447/- DECLARED BY THE AP PELLANT UNDER THE HEAD SHORT TERM CAPITAL GAIN AS INCOME FROM BUSINESS. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN SUSTAINING THE DISALLOWANCE OF A SUM OF RS.7,72,443/- U/S.14A OF THE ACT. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONCURRING WITH THE DISALLOWANCE OF RS.8,000/- OUT OF RS.40,00 0/- CLAIMED BY THE APPELLANT AS DEPRECIATION ON MOTOR CAR. 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN APPROVING THE DISALLOWANCE OF RS.7,730/- OUT OF TELEPHONE EXP ENSES OF RS.38,649/- CLAIMED BY THE APPELLANT. 6. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN SUMMARILY REJECTING THE GROUND RAISED AGAINST LEVY OF INTERES T U/S.234A, 234B, 234C AND 234D OF THE ACT. 9. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT T REATED THE INCOME FROM SALE OF SHARES AS INCOME FROM BUSINESS OF THE ASSESSEE AS AGAINST THE CONTENTION OF THE ASSESSEE THAT THE SAME SHOULD BE ASSESSABLE UNDER THE HEAD CAPITAL GAINS. THE LD. D EPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSING OFFICER A FTER CONSIDERING VARIOUS ASPECTS I.E. MAGNITUDE OF PURCHASE AND SALE OF SHARES, DIVIDEND INCOME RECEIVED, MARKETABILITY OF SHARES, SOURCE OF FUNDS FOR ACQUIRING SHARES, TREATMENT OF SHARES ON THEIR SALE ACCOUNTS, MOTIVES FOR THE PURCHASE AND SALE OF SHARES ETC., H ELD THAT THESE SANJAY K. GUPTA 5 TRANSACTIONS ARE CARRIED OUT BY THE ASSESSEE IN PUR CHASE AND SALE OF SHARES ARE NOTHING BUT BUSINESS INCOME AND SHOULD B E ASSESSED AS SUCH. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THIS VIEW OF THE ASSESSING OFFICER IS UPHELD BY THE CIT(A). 10. COMING TO THE DISALLOWANCE MADE U/S.14A, THE LD . DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESS EE EARNED DIVIDEND INCOME OF RS.1,77,164/- AND HE HAS NOT MAD E ANY DISALLOWANCE TOWARDS EXPENSES FOR EARNING SUCH DIV IDEND INCOME. THE ASSESSING OFFICER DISALLOWED RS. 6,81,400/- TOW ARDS INTEREST AND RS. 91,043/- BEING 0.5% OF AVERAGE VALUE OF INVESTM ENT U/S.14A READ WITH RULE 8D. DR SUBMITS THAT THE LD. CIT(A) SUST AINED SUCH DISALLOWANCE. 11. COMING TO DISALLOWANCE OF DEPRECATION ON MOTOR CAR AND TELEPHONE EXPRESSES, HE SUBMITS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENTS MADE DISALLOWANCE OF DEP RECIATION MOTOR CAR OF RS. 8,000/- OUT OF RS. 40,000/- AND T ELEPHONE EXPENSES OF RS. 7,730/-/- OUT OF RS. 38,649/- HE SUBMITS THA T THE ASSESSING OFFICER DISALLOWED 20% OF THESE EXPENSES TREATING T HEM FOR PERSONAL USE. THE LD. CIT(A) SUSTAINED THE SAID DISALLOWAN CES. 12. ON GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND TAKING INTO CONSIDERATION THE SUBMISSION OF THE LE ARNED DR, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE CIT(A). T HE APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO.6393/MUM/2012 A.Y. (2008-09):- 13. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS:- SANJAY K. GUPTA 6 1 THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN PASSING THE APPELLATE ORDER, WHICH IS INVALID AND BAD IN LAW. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ASSESSMENT OF RS.1,67,16,101/- DECLARED BY THE APPELLANT UNDER THE HEAD SHORT TERM CAPITAL GAIN AS INCOME FROM BUSINESS. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN SUSTAINING THE DISALLOWANCE OF A SUM OF RS.7,40,359/- U/S.14A OF THE ACT. 4. THE LEARNED CIT(A) HAS ERRED IN LAWS AND IN FACT S IN SUMMARILY REJECTING THE GROUND RAISED AGAINST THE LEVY OF INT EREST U/S.234A, 234B, 234C AND 234D OF THE ACT. 14 THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT T REATED THE INCOME FROM SALE OF SHARES AS INCOME FROM BUSINESS OF THE ASSESSEE AS AGAINST THE CONTENTION OF THE ASSESSEE THAT THE SAME SHOULD BE ASSESSABLE UNDER THE HEAD CAPITAL GAINS. THE LD. D EPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESSING OFFICER A FTER CONSIDERING VARIOUS ASPECTS MAGNITUDE OF PURCHASE AND SALE OF S HARES, DIVIDEND INCOME RECEIVED, MARKETABILITY OF SHARES, SOURCE OF FUNDS FOR ACQUIRING SHARES, TREATMENT OF SHARES ON THEIR SALE ACCOUNTS, MOTIVES FOR THE PURCHASE AND SALE OF SHARES ETC., HELD THAT THESE TRANSACTIONS ARE CARRIED OUT BY THE ASSESSEE IN PURCHASE AND SAL E OF SHARES ARE NOTHING BUT BUSINESS INCOME AND SHOULD BE ASSESSED AS SUCH. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THIS VIEW OF THE ASSESSING OFFICER IS UPHELD BY THE CIT(A). 15. COMING TO THE DISALLOWANCE MADE U/S.14A, THE LD . DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE ASSESS EE EARNED DIVIDEND INCOME OF RS.3,46,622 AND HE HAS NOT MADE ANY DISALLOWANCE IN RELATION TO DISALLOWANCE TOWARDS EX PENSES FOR EARNING SUCH DIVIDEND INCOME. THE ASSESSING OFFIC ER DISALLOWED RS. SANJAY K. GUPTA 7 7,40,359/- TOWARDS INTEREST AND RS. 87,238/- BEING 0.5% OF AVERAGE VALUE OF INVESTMENT U/S.14A READ WITH RULE 8D. DR SUBMITS THAT THE LD. CIT(A) SUSTAINED SUCH DISALLOWANCE. 16. ON GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND TAKING INTO CONSIDERATION THE SUBMISSION OF THE LEA RNED DR, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE CIT(A). TH E APPEAL OF THE ASSESSEE IS DISMISSED. 17. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JULY, 2016. SD/- SD/- (RAJENDRA) (C.N. PRASAD ) / ACCOUNTANT MEMBER $ % /JUDICIAL MEMBER MUMBAI; ( DATED 29 TH JULY, 2016 . % . ./ RJ , SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI