CIT, FARIDABAD vs. MILAP RAJ BHANSALI

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ITA/477/2010HC Punjab & HaryanaPHHC01093414201011 April 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed, with liberty granted to the revenue to file an application for revival of the appeal as prayed for. The Court clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits. The legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. The specific findings of the ITAT regarding the classification of income as short-term capital gains, long-term capital gains, or business income were not adjudicated upon by the High Court due to the revenue's decision not to press the appeal. Therefore, no ratio decidendi on the merits of the tax classification was established by this High Court judgment.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Faridabad (appellant-revenue) against the order dated 24.07.2009 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench-E, New Delhi. The ITAT's order pertained to assessment year 2005-06 and was in relation to an appeal filed by Shri Milap Raj Bhansali (respondent-assessee). The core dispute involved the classification of income derived from share trading as either short-term capital gains, long-term capital gains, or business income. The assessee had treated income of ₹13,70,900/- from trading of shares as business income, while the revenue sought to classify certain amounts as capital gains. The appeal was filed under Section 260A of the Income Tax Act, 1961.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the order of the CIT(A) in holding income of ₹1,75,736/- and ₹6,72,625/- as short-term capital gains and income of ₹2,23,950/- and ₹2,98,558/- as long-term capital gains, disregarding the fact that the income of ₹13,70,900/- from trading of shares is treated as business income under Section 28 of the Income Tax Act, 1961, as the assessee was dealing in shares with the motive to earn profit and not to earn dividend? Contentions: Assessee: Not recorded in the judgment. Revenue: The revenue, through its counsel, submitted that in view of Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 08.03.2016 issued by the Central Board of Direct Taxes, it did not wish to press the present appeal as the tax effect involved was less than ₹20 lacs. The revenue prayed for liberty to file an application for revival of the appeal if something survived therein.

Which sections of the Income-tax Act were involved?

Section 260A,Section 28

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.04.2016 Commissioner of Income Tax, Faridabad .......Appellant Versus Shri Milap Raj Bhansali ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, Advocate for Mr. Tajender K. Joshi, Advocate for the appellant. Mr. Akshay Bhan, Sr. Advocate with Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 24.7.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench- E, New Delhi, in ITA No. 312/Del/2009, for the assessment year 2005-06, raising the following substantial questions of law: Whether, on the facts and in the circumstances of the case, the Ld. ITAT was right in law in upholding the order of the Ld. CIT(A) in holding income of ` 1,75,736/- and ` 6,72,625/- as short term capital gains and income of ` 2,23,950/- and ` 2,98,558/- as long term capital gains disregarding the fact that the income of ` 13,70,900/- from trading of shares is treated as business income u/s 28 of the Income Tax Act, 1961 as the assessee was dealing in shares with the motive to earn profit and not to earn dividend? REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 11.04.2016 JUDGE reema REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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