Anoop Kumar Gupta, New Delhi v. ITO, New Delhi

ITA 4063/DEL/2009 | 2006-2007
Pronouncement Date: 12-02-2010 | Result: Allowed

Appeal Details

RSA Number 406320114 RSA 2009
Assessee PAN AALPM8403A
Bench Delhi
Appeal Number ITA 4063/DEL/2009
Duration Of Justice 4 month(s) 5 day(s)
Appellant Anoop Kumar Gupta, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 12-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 12-02-2010
Date Of Final Hearing 03-02-2010
Next Hearing Date 03-02-2010
Assessment Year 2006-2007
Appeal Filed On 07-10-2009
Judgment Text
I.T.A. NO. 4061 4062 4063/DEL/2009 1/14 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH A BEFORE SHRI K. G. BANSAL ACCOUTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER ITA NO. 4061 /DEL/2009 (ASSESSMENT YEAR 2006-07) ANIL KUMAR MITTAL VS. ITO OSD RANGE 5 5190 LAHORI GATE NEW DELHI. DELHI-110 006 ITA NO. 4062 /DEL/2009 (ASSESSMENT YEAR 2006-07) ARUN KUMAR GUPTA VS. ITO OSD RANGE 5 5190 LAHORI GATE NEW DELHI. DELHI 110 006 ITA NO. 4063 /DEL/2009 (ASSESSMENT YEAR 2006-07) ANOOP KUMAR GUPTA VS. ITO OSD RANGE 5 5190 LAHORI GATE NEW DELHI. DELHI 110 006 (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AALPM8403A APPELLANT BY: SHRI VINOD BINDAL MS.SWEETY KOTHARI CA RESPONDENT BY: SHRI SAMBIT TRIPATHY SR. DR ORDER PER GEORGE MATHAN JM: I.T.A. NO. 4061 4062 4063/DEL/2009 2/14 1. I.T.A. NO. 4061/DEL/2009 IS AN APPEAL FILED BY T HE ASSESSEE AGAINST THE ORDER OF CIT(A) VIII NEW DELH I IN APPEAL NO.88/2008-09 DATED 10.08.2009 FOR THE ASSESSMENT YEAR 2006-07 IN THE CASE OF SHRI ANIL KUMAR MITTAL. I.T.A. NO. 4062/DEL/2009 IS AN APPEA L PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) VIII NEW DELHI IN APPEAL NO.95/2008-09 DATE D 10.08.2009 FOR THE ASSESSMENT YEAR 2006-07 IN THE CASE OF SHRI ARUN KUMAR GUPTA AND I.T.A. NO. 4063/DEL/2009 IS AN APPEAL FILED BY THE ASSESSEE AG AINST THE ORDER OF LD. CIT(A) VIII NEW DELHI IN APPEAL NO.90/2008-09 DATED 10.08.2009 FOR THE ASSESSMENT YEAR 2006-07 IN THE CASE OF SHRI ANOOP KUMAR GUPTA. AS THE ISSUES IN ALL THE THREE APPEALS ARE IDENTICA L ALL THESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 2. IN I.T.A. NO. 4062/DEL/2009 AND 4063/DEL/2009 T HE ASSESSEES HAVE CHALLENGED THE ACTION OF CIT(A) IN CONFIRMING THE ORDER OF THE A.O. IN COMPUTING THE INCOME OF THE ASSESSEE FROM THE PURCHASE AND SALE O F SHARES DISCLOSED AS SHORT TERM CAPITAL GAIN BUT ASS ESSED AS BUSINESS INCOME. IN ALL THE THREE APPEALS THE ASSESSEES HAVE CHALLENGED THE ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION MADE ON ESTIMATE BASIS FOR THE PURPOSE OF HOUSE HOLD EXPENSES. SHRI VINOD KUMAR I.T.A. NO. 4061 4062 4063/DEL/2009 3/14 BINDAL AND MS. SWEETY KOTHARI C.A. REPRESENTED THE ASSESSEE AND SHRI SAMBIT TRIPATHY SR. DR REPRESENT ED THE REVENUE. IT WAS THE SUBMISSION BY THE LD. A.R. THAT THE APPEAL IN I.T.A. NO. 4063/DEL/2009 IN THE CASE OF SHRI ANOOP KUMAR GUPTA CAN BE TAKEN AS THE SAMPLE CASE FOR THE PURPOSE OF DECIDING ALL THE THREE APPE ALS. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD PURCHASED SHARES IN THREE COMPANIES BEING AUTOMATE AXLE TANE JA AGRO AND IDFC. IT WAS THE SUBMISSION THAT THE SHAR ES OF AUTOMATE AXLE AND TANEJA AGRO HAVE BEEN PURCHASED FROM THE OPEN MARKET AND THE SHARE OF IDF C WAS BY APPLYING FOR THE IPO. IT WAS THE SUBMISSION THAT ON 16 TH OF SEP 2005 THE ASSESSEE HAD PURCHASED 1500 SHARES OF AUTOMATE AXLE ON 24.11.2005 THE ASSESSE E HAD PURCHASED 5000 SHARES OF TANEJA AGRO AND ON 10.08.2008 THE ASSESSEE HAD PURCHASED 1 06 135 SHAR ES OF IDFC THROUGH IPO. IT WAS THE SUBMISSION THAT IN MARCH 2006 THE ASSESSEE HAD SOLD ALL THE SHARES PURCHASED IN RESPECT OF AUTOMATE AXLE AND TANEJA AGRO AND IN SEP 2005 THE ASSESSEE HAD SOLD 1 LACS SHARES OF IDFC OUT OF 1 06 135 SHARES OF IDFC ALLOT TED TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE AS SESSEE WAS ALSO HAVING OTHER INVESTMENTS IN SHARES WHICH WAS ALSO SHOWN IN THE BALANCE SHEET OF THE ASSESSEE. I T WAS THE SUBMISSION THAT THE SHARES HAD BEEN SOLD WITHIN A I.T.A. NO. 4061 4062 4063/DEL/2009 4/14 PERIOD OF LESS THAN 12 MONTHS AND THE ASSESSEE HAD DECLARED SHORT-TERM CAPITAL GAIN. THE A.O. WAS OF THE VIEW THAT THE ASSESSEE WAS PURCHASING AND SELLING S HARES AND WAS THUS DOING A BUSINESS AND CONSEQUENTLY HAD TREATED THE INCOME GENERATED BY THE ASSESSEE FROM T HE PURCHASE AND SALE OF SHARES WHICH WAS OFFERED TO T AX AS SHORT-TERM CAPITAL GAIN AS THE BUSINESS INCOME OF THE ASSESSEE. IT WAS THE SUBMISSION THAT AS THE ASSESS EE HAD ALSO PAID THE STT ON THE PURCHASE AND SALE OF SHARE S LISTED ON STOCK EXCHANGE THE SHORT TERM CAPITAL GA IN WAS TAXABLE @ 10% AND BY TREATING THE SAID INCOME DECLA RED BY THE ASSESSEE AS BUSINESS INCOME THE A.O. HAS PROPOSED TO TAX THE SAME @ 30%. IT WAS ALSO SUBMIT TED THAT EVEN BY TREATING THE SAME AS BUSINESS INCOME THE A.O. DID NOT GRANT THE ASSESSEE THE BENEFIT OF DEDU CTION OF STT PAID ON THE PURCHASE AND SALE OF SHARES OR T HE DEDUCTION OF THE INTEREST EXPENDITURE ALLEGED TO HA VE BEEN INCURRED BY THE ASSESSEE ON THE FUNDS BORROWED FOR THE PURCHASE AND SALE OF SHARES. 3. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS A S HARE HOLDER AS ALSO THE DIRECTOR OF THE COMPANY NAMELY KRBL LTD. AND A PARTNER IN THE FIRM KRBL WHICH WAS MAINLY IN THE BUSINESS OF MANUFACTURE EXPORT AND S ALE OF BASMATI RICE. IT WAS THE SUBMISSION BEFORE THE A.O. AND THE CIT(A) THAT THE ASSESSEE WAS NOT DOING THE I.T.A. NO. 4061 4062 4063/DEL/2009 5/14 PURCHASE AND SALE OF THE SHARES AS A BUSINESS. IT WAS THE SUBMISSION THAT THE LD. CIT(A) IN PARA 8.3 OF H IS ORDER HAS DRAWN THE PRESUMPTION THAT IN RESPECT OF IDFC SHARES THE ASSESSEE HAS BORROWED FUNDS FOR THE PURCHASE OF SHARES. IT WAS THE SUBMISSION THAT IDF C HAD ISSUED THE IPO AND FOR THE PURPOSE OF HAVING BE TTER CHANCE IN GETTING A LARGER INVESTMENT IN THE SHARES THE ASSESSEE HAD THROUGH BIRLA GLOBAL ASSET FINANCE CO. LTD. APPLIED FOR SHARES FOR A TOTAL CONSIDERATION O F 20.40 CRORES. IT WAS THE SUBMISSION THAT OUT OF THE SAID AMOUNT OF RS.20.40 CRORES THE ASSESSEE HAD INVESTE D HIS OWN FUNDS TO AN EXTENT OF RS.1 14 94 562/- AND THE ASSESSEE HAD RECEIVED 106135 SHARES FOR A CONSIDERA TION OF RS.50 75 714/- AND HAD ALSO RECEIVED A REFUND OF RS.64 18 848/-. IT WAS THE SUBMISSION THAT FOR APP LYING FOR SHARES IN A LARGE VOLUME IN IPO THE ASSESSEE H AD BORROWED FUNDS FROM BIRLA GLOBAL ASSET FINANCE CO. LTD. NO PORTION OF THE SHARES PURCHASED IN RESPECT OF IDFC WAS OUT OF THE BORROWED FUNDS. IT WAS THE FUR THER SUBMISSION THAT THE CIT(A) HAS ALSO GIVEN A FINDING THAT THE ASSESSEE HAS BEEN FREQUENTLY CONTINUOUSLY AND REGULARLY ENGAGING HIMSELF IN VOLUMINOUS TRANSACTIO N OF PURCHASE AND SALE OF SHARES. IT WAS THE SUBMISSION THAT THERE WAS ONLY THREE TRANSACTIONS OF PURCHASE OF TH E SHARES. IT WAS NOT CONTINUOUS NOR WAS IT A REGULAR I.T.A. NO. 4061 4062 4063/DEL/2009 6/14 ACTIVITY. IT WAS THE SUBMISSION THAT THE PURCHASE AND SALE OF SHARES WAS ALSO DONE ON PRACTICALLY ONE DAY BUT THE SHARES WHICH WERE PURCHASED AND SOLD BY THE ASSESSEE WERE OF DIFFERENT LOTS AND ALSO OF DIFFER ENT PRICES ON THE SAME DAY. THE PURCHASE IS DONE THROU GH THE STOCK EXCHANGE AND THE STOCK EXCHANGE FIXES THE BEST PRICE IN RESPECT OF PURCHASE AND SALE OF SHARE S. IT WAS THE FURTHER SUBMISSION THAT CIT(A) WAS OF THE V IEW THAT THE ASSESSEE HAD PUT NECESSARY SYSTEM IN PLACE TO ENSURE SMOOTH EXECUTION OF PURCHASE AND SALE OF SHA RES AND FOR THIS SPECIFIC PURPOSE HAS MAINTAINED A DEMA T ACCOUNT. IT WAS THE SUBMISSION THAT THE DEMAT ACCO UNT WAS NECESSARY AS NONE OF THE SHARES WAS IN THE PHYS ICAL FORM. IT WAS THE FURTHER SUBMISSION THAT CIT(A) HA D ALSO DISLODGED THE ASSESSEES SUBMISSION THAT IN TH E PRECEDING ASSESSMENT YEAR ALSO SHORT TERM CAPITAL GAIN ON THE SALE OF SHARES HAS BEEN ACCEPTED BY THE A.O. AS SHORT TERM CAPITAL GAIN AND THAT NO PRINCIPLE OF RE S- JUDICATA APPLIES ON THE GROUND THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD HIRED PROFESS IONAL SERVICES OF BIRLA GLOBAL ASSET FINANCE CO. LTD. FOR ACQUIRING THE SHARES OF IDFC. IT WAS THE SUBMISSIO N THAT NO PROFESSIONAL SERVICES OF BIRLA GLOBAL ASSET FINANCE CO. LTD. WERE USED BY THE ASSESSEE. THE APPLICATION FOR THE IPO OF IDFC WAS MADE BY MAKING A I.T.A. NO. 4061 4062 4063/DEL/2009 7/14 LARGE APPLICATION THROUGH SINGLE FORM ITSELF AND TH E FUNDS WERE ARRANGED THROUGH BIRLA GLOBAL ASSETS FINANCE CO. LTD. ONLY FOR THE PURPOSE OF MAKING A L ARGE APPLICATION SO THAT THE CHANCES OF GETTING THE SHAR ES APPLIED FOR IS THERE. IT WAS THE SUBMISSION THAT T HERE WAS NO PHYSICAL TRANSFER AND IN FACT THE PURCHASE A ND SALE WAS SINGLE DAY TRANSACTION WHICH WAS BROKEN IN TO MULTIPLE PIECES DUE TO THE ACTION OF THE STOCK EXCH ANGE AND IN FACT THE PURCHASE AND SALE WERE ON THE SAME DAY THOUGH THE GAP BETWEEN THE PURCHASE AND SALE VARIED BETWEEN 4 MONTHS TO 6 MONTHS AND IN THE CASE OF IDF C ABOUT 1 MONTH. IT WAS THE FURTHER SUBMISSION THAT NORMALLY WHEN IPOS ARE OFFERED AND DIFFERENCE BETWE EN THE MARKET PRICE AND THE IPO PRICE WOULD BE A MARGI N OF ABOUT 20-25% AND AS THE ASSESSEE SUSPECTED THE FALL IN THE PRICES OF THE SHARES OF IDFC AND ASSESSEE HAD S OLD 1 LAC SHARES OUT OF 106135 SHARES ALLOTTED TO THE ASS ESSEE IN THE CASE OF IDFC. IT WAS THUS A SUBMISSION THAT THE SHORT-TERM CAPITAL GAIN AS DECLARED BY THE ASSESSEE WAS LIABLE TO BE ACCEPTED. 4. IT WAS THE FURTHER SUBMISSION THAT IN RESPECT OF THE ADDITION CONFIRMED BY THE CIT(A) ON ACCOUNT OF LOW WITHDRAWAL THAT THE DRAWING OF THE ASSESSEE AFTER CONSIDERING OF THE MEDICLAIM CHILDREN SCHOOL FEE LIP DEMAT CHARGES ELECTRICITY EXPENSES AND HOUSE TAX W AS I.T.A. NO. 4061 4062 4063/DEL/2009 8/14 RS.7 26 526/-. IT WAS THE SUBMISSION THAT NEITHER THE A.O. NOR THE CIT(A) HAD POINTED OUT ANY DEFECT IN T HE ACCOUNT OF THE ASSESSEE NOR BROUGHT OUT ANY MATERIA L TO JUSTIFY HIGHER ESTIMATE OF EXPENDITURE. HE RELIED UPON THE DECISION OF THE THIRD MEMBER OF ITAT IN THE CAS E OF RAJ KUMAR JAIN REPORTED IN 50 ITD 1 TO SUPPORT H IS CONTENTION THAT IN THE ABSENCE OF ANY MATERIAL BROU GHT ON RECORD BY THE REVENUE AUTHORITIES TO JUSTIFY HIG HER ESTIMATE OF EXPENDITURE THE ASSESSEES VERSION OF HOUSE HOLD EXPENDITURE HAD TO BE ACCEPTED AND THE IMPUGNE D ADDITION DELETED. 5. IN REPLY THE LD. D.R. SUBMITTED THAT THE DECISIO N OF HON'BLE SUPREME COURT IN THE CASE OF SUTLEJ COTTON MILLS SUPPLY AGENCY LTD. REPORTED IN APPLIED AND TH E PRINCIPLES LAID DOWN THEREIN WAS TO BE CONSIDERED. HE VEHEMENTLY SUPPORTED THE ORDER OF THE CIT(A) ON BOT H THE ISSUES. 6. IN REPLY THE LD. A.R. SUBMITTED THAT THE DECISI ON OF THE HON'BLE SUPREME COURT IN THE CASE OF SUTLEJ COTTON MILLS SUPPLY AGENCY LTD. DID NOT APPLY IN SO FAR AS IN THAT CASE THE ISSUE WAS THE PURCHASE AND SALE OF S HARES IN THE SISTER COMPANY WHEREAS IN THE ASSESSEES CAS E THE PURCHASE AND SALE OF SHARES WERE NOT OF SISTER CONC ERNS AND WAS NOT REGULAR AND THE SAME WAS DONE THROUGH T HE STOCK EXCHANGE AND THE STT TAX HAD ALSO BEEN PAID. I.T.A. NO. 4061 4062 4063/DEL/2009 9/14 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ORDER OF LD. CIT(A) AT PAGE 15 AND 16 SHOWS THE STATEMENT OF PURCHASE AND SALE OF SHARES. IT IS NO TICED THAT THE ASSESSEE HAS PURCHASED 1500 SHARES OF AUTOMATE AXLE ON 16.9.2005. THE SHARES HAVE BEEN PURCHASED IN VARIOUS LOTS THOUGH ON THE SAME DAY. IT IS FURTHER NOTICED THAT THE SHARES HAVE BEEN SOLD SUBSTANTIALLY ON 24.03.2006 AND ON 27.03.2006. ON 27.03.2006 THERE IS ONLY ONE TRANSACTION WHEREAS ON 24.03.2006 THE SALE HAS BEEN MADE IN DIFFERENT LOTS . IN THE CASE OF TANEJA AGRO 5000 SHARES HAVE BEEN PURCHASED ON 24.11.2005 AND THE PURCHASE IS ON THE SAME DAY BUT OF DIFFERENT LOTS. THESE SHARES HAVE BEEN SOLD ON 22.03.2006 IN MULTIPLE LOTS. IN RESPECT OF IDFC SHARES IT HAS BEEN NOTICED THAT IT HAS BEEN ALLOTT ED TO THE ASSESSEE ON 10.08.2005 AND THE SAME HAVE BEEN SOLD ON VARIOUS DATES BEING 05.09.2005 16.09.2005 08.09.2005 30.08.2005 18.08.2005 17.08.2005 AND 12.08.2005. THUS WHAT IS EVIDENT FROM THE ACT OF THE ASSESSEE IS THAT THE PURCHASES HAVE BEEN DONE ON ON E DAY AND IN TWO OF THE CASES THE SALE HAS AGAIN BEEN DONE ON 1 DAY AND IN RESPECT OF THE SHARES OF IDFC THE SALES HAS BEEN DONE ON MULTIPLE DAYS. IN THESE CIRCUMSTANCES THE FINDING OF LD. CIT(A) IN PAGE 17 OF HIS ORDER IN PARA 8.3 THAT THE ASSESSEE HAS BEEN I.T.A. NO. 4061 4062 4063/DEL/2009 10/14 FREQUENTLY CONTINUOUSLY AND REGULARLY ENGAGING HIM SELF IN INVOLVING IN TRANSACTION OF PURCHASE AND SALE OF SHARES CANNOT BE SUSTAINED. THE SALE OF IDFC HAVING BEEN MADE ON MULTIPLE DAYS DOES NOT SHOW ANY REGULARITY OR CONTINUITY AS THE SALE IS OF 1 LAC SH ARES AND THIS CANNOT BE DONE IN ONE DAY OR IN ONE LOT & THE STOCK EXCHANGE ITSELF WOULD NOT PERMIT IT AS THIS WOULD L EAD TO A DROP IN THE PRICE OF IDFC SHARES IN A MANNER THAT THE DROP WOULD HIT THE CIRCUIT. THERE IS NO FREQUENCY CONTINUITY NOR REGULARITY IN THE PURCHASE AND SALE OF SHARES BY THE ASSESSEE. JUST BECAUSE THE ASSESSEE HAS MADE A PROFIT FROM THE PURCHASE AND SALE OF SHARES DOES NOT MEAN THAT THE ASSESSEE IS DOING THE BUSINESS OF PURCHASING AND SELLING OF SHARES. THE INTENTION OF THE ASSESSEE ALSO DOES NOT SHOW THAT THE ASSESSEE IS DO ING THE BUSINESS OF PURCHASE AND SALE OF THE SHARES. I N FACT A PERUSAL OF THE BALANCE SHEET SHOWS THAT THE ASSESSE E HAS SUBSTANTIAL INVESTMENT IN THE SHARES OF VARIOUS COMPANIES. IT IS ALSO NOTICED THAT THE ASSESSEE DO ES HAVE SUBSTANTIAL CAPITAL AVAILABLE WITH HIM FOR THE PURPOSE OF MAKING THE INVESTMENT. THE FINDING OF L D. CIT(A) THAT THE ASSESSEE HAS PUT THE NECESSARY SYST EM IN PLACE TO ENSURE SMOOTH EXECUTION OF PURCHASE AND SA LE OF SHARES ALSO DOES NOT SUPPORT THE CASE OF THE REV ENUE IN SO FAR AS THE SHARES ARE NOW AVAILABLE ONLY IN T HE I.T.A. NO. 4061 4062 4063/DEL/2009 11/14 DEMATTED FORM AND WITHOUT DEMATTED ACCOUNT NO SHARE CAN BE HELD BY THE ASSESSEE NOR CAN THESE SHARES BE TRANSACTED. PHYSICAL DELIVERY OF THE SHARES IS NO MORE AVAILABLE IN THE PRESENT PAPERLESS SCENARIO IN RESP ECT OF THE SHARES. IN THE EARLIER YEARS ALSO IT IS NOTICE D THAT THE ASSESSEE HAS MADE SHORT-TERM CAPITAL GAIN AND IT HA S BEEN ACCEPTED AS SHORT-TERM CAPITAL GAIN BY THE A.O . THE TRANSACTION DONE BY THE ASSESSEE ARE NOT VOLUMINOUS ENOUGH NOR CAN IT BE SAID TO BE A CONTIN UOUS PROCESS WHICH HAS BEEN DONE BY THE ASSESSEE TO TREA T THE SAME AS BUSINESS ACTIVITY. ONLY BECAUSE BY TREATIN G THE PROFIT FORM SALE AND PURCHASE OF SHARES BY THE ASSE SSEE AS BUSINESS INCOME TAX IS LEVIABLE @ 30% AS AGAINST 10% IF THE SAME IS TREATED AS SHORT TERM CAPITAL GA IN IN VIEW OF THE FACT THAT THE ASSESSEE HAS PAID THE STT WOULD NOT BE GROUND ENOUGH TO SHIFT THE CLAIM OF TH E ASSESSEE OF SHORT TERM CAPITAL GAIN WHICH HAS ALSO BEEN CONTINUOUSLY ACCEPTED IN THE EARLIER YEARS TO A CAS E OF BUSINESS INCOME. THE PURCHASE OF THE SHARES OF IDF C ALSO IT IS NOTICED IS ONLY OUT OF THE FUNDS OF THE ASSESSEE AND THE LOAN TAKEN FROM BIRLA GLOBAL ASSET FINANCE CO. LTD. WAS ONLY FOR THE PURPOSE OF APPLYING FOR A LA RGER VOLUME OF SHARES IN IDFC. THE LOAN AMOUNT HAS NOT BEEN UTILIZED BY THE ASSESSEE FOR THE PURCHASE OF S HARES. IN FACT THE ASSESSEE HAS RECEIVED REFUND OF I.T.A. NO. 4061 4062 4063/DEL/2009 12/14 RS.64 18 848/- OUT OF HIS OWN INVESTMENT OF RS.1 14 94 562/- FOR THE PURCHASE OF SHARES OF IDFC . IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ASS ESSEE IS NOT IN THE BUSINESS OF PURCHASE AND SALE OF THE SHARES AND THE PROFITS ON THE PURCHASE AND SALE OF SHARES IS LIABLE TO BE ASSESSED ONLY UNDER THE HEAD SHORTS TE RM CAPITAL GAIN. EVEN OTHERWISE IF THE ASSESSEE WAS D OING BUSINESS IN PURCHASE & SALE OF SHARES THERE W NO R EASON FOR THE ASSESSEE TO HOLD THE SHARES FOR 4-6 MONTHS. NORMALLY A BUSINESSMAN WOULD LIKE TO INCREASE HIS TURNOVER EVEN IF MARGINS ARE LESS AS THIS WOULD LEA D TO A LARGER VOLUME OF PROFIT EVEN IF THE PERCENTAGE OF P ROFIT COMPARED TO TURNOVER IS LESS. AFTER ALL THIS IS WH Y THE CONCEPT OF WORKING CAPITAL COMES IN. AS WE HAVE HE LD THAT THE INCOME FROM THE PURCHASE AND SALE OF SHARE S IS LIABLE TO BE ASSESSED ONLY UNDER THE HEAD SHORT TER M CAPITAL GAIN THE ISSUE AS TO THE ALLOWABILITY OF S TT PAID AS ALSO THE INTEREST OF THE BORROWINGS DOES NOT SUR VIVE FOR CONSIDERATION. IN THE CIRCUMSTANCES THE ORDER OF THE LD. CIT(A) IS REVERSED & THE A.O. IS DIRECTED TO AS SESS THE INCOME FROM THE PURCHASE & SALE OF SHARES AS SH ORT TERM CAPITAL GAINS AS DISCLOSED BY THE ASSESSEE. 8. IN RESPECT OF THE ADDITION CONFIRMED ON ACCOUNT OF THE ESTIMATED HOUSEHOLD WITHDRAWAL IT IS NOTICED THAT THE REVENUE HAS NOT BEEN ABLE TO POINT OUT OR BRING ON I.T.A. NO. 4061 4062 4063/DEL/2009 13/14 RECORD ANY MATERIAL TO JUSTIFY HIGHER ESTIMATE OF EXPENDITURE. IN FACT IF ALL THE EXPENDITURE AS REC ORDED BY THE CIT(A) ITSELF IF SEEN THE TOTAL WITHDRAWAL I S NEARLY 20 LACS. THE LARGE CHUNK HAS GONE TOWARDS T HE THREE CHILDRENS SCHOOL FEES AND THE ASSESSEE DOES HAVE WITHDRAWALS OF RS.7 26 526/- FOR THE HOUSE HOLD EXPENDITURE IN RESPECT OF THE HUSBAND AND WIFE ESPECIALLY WHEN THE CHILDREN ARE STUDYING IN BOARDI NG SCHOOL AND AN EXPENDITURE OF NEARLY RS.11.62 LACS H AS BEEN INCURRED ON THE HOSTEL EDUCATION OF THE THREE CHILDREN. AS THE REVENUE HAS NOT BEEN ABLE TO BRIN G OUT ANY MATERIAL OR EVIDENCE TO JUSTIFY HIGHER ESTIMATE OF EXPENDITURE THE ASSESSEES VERSION OF HOUSE HOLD EXPENSES HAS TO BE ACCEPTED AND RESPECTFULLY FOLLOW ING THE DECISION OF THE LD. THIRD MEMBER IN THE CASE OF RAJ KUMAR JAIN REFERRED TO SUPRA THE FINDING OF LD. CI T(A) ON THIS ISSUE IS REVERSED AND THE ADDITION MADE STA NDS DELETED. 9. AS THE FACTS IN THIS CASE ARE IDENTICAL TO THE F ACTS IN THE CASE OF SHRI ARUN KUMAR GUPTA IN I.T.A. NO. 4062/DEL/2009 THE FINDING ON BOTH THESE ISSUES WOUL D APPLY TO I.T.A. NO. 4062/DEL/2009 ALSO. 10. AS THE ISSUE IN THE CASE OF ANIL KUMAR MITTAL I N I.T.A. NO. 4061/DEL/2009 IS ONLY IN RESPECT OF THE ADDITIO N CONFIRMED IN RESPECT OF THE ESTIMATED ADDITION ON I.T.A. NO. 4061 4062 4063/DEL/2009 14/14 ACCOUNT OF HOUSE HOLD EXPENSES OUR FINDING ON THE 2 ND ISSUE IN THE CASE OF ANOOP KUMAR GUPTA WOULD APPLY IN THIS CASE ALSO AND CONSEQUENTLY THE ADDITION STANDS DELETED. 11. IN THE RESULT ALL THE THREE APPEALS IN I.T.A. NOS.4061/DEL/2009 4062/DEL/2009 AND 4063/DEL/2009 STAND ALLOWED. 12. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 12 TH FEB. 2010. SD./- SD./- (K. G. BANSAL) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:12 TH FEB. 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI