Janak S. Rangwalla v. Asstt. CIT

11 SOT 627Income Tax Appellate Tribunal2007#1541 most cited

What is Janak S. Rangwalla v. Asstt. CIT authority for?

The rule of consistency applies to the characterization of income from the sale of shares or mutual funds. If the Revenue has consistently accepted an assessee as an investor, treating income from such transactions as capital gains in prior years, it cannot arbitrarily re-characterize similar transactions as business income in subsequent assessment years without a fundamental change in facts.

73

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2015 to 2025.

Also referred to as

Janak S. Rangwalla v. Asstt. CIT · 11 SOT 627 · rule of consistency · capital gains · business income · sale of shares · sale of mutual funds · investor or trader · re-characterization of income · Section 45 · Section 10(38) · income tax proceedings

Sections most often in play

Section 10(38)Section 14ASection 68Section 10(34)Section 131Section 142(1)Section 143(3)

Issues it is cited on

period of holdingshort term capital gainsrule of consistencysection 10(34)section 14a(2)date of transfersection 45short term capital gaindisallowance under section 14asection 10(38)long term capital gainsliable to tax

Judgments citing Janak S. Rangwalla v. Asstt. CIT

Late Shri Lalchand S. Rohra, Mumbai vs. Addl CIT 14(2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 7999/MUM/2010[2006-07]Status: DisposedITAT Mumbai29 Apr 2016AY 2006-07

Bench: Shri G.S.Pannu & Shri Joginder Singhlate Shri Lalchand S. Rohra, By Legal Heir : Mrs. Beena Sachev, 101-A, Embassy Apartments, 46, Nepean Sea Road, Mumbai 400 026 Pan:Aaspr 0251L ... Appellant

For Appellant: Shri Vimal PunmiyaFor Respondent: Shri Yogesh Kamat
Section 10(38)Section 143(3)Section 14ASection 234BSection 271(1)(c)

…ee has not used any borrowed funds for the purpose of purchase of shares and same is also fortified on perusal of 4 profit and loss account, that no interest has been claimed towards expenses. The ITAT Mumbai has held in the case of Janak S Rangwala vs ACIT, 11 SOT 627 that mere volume of transaction does not mean that assessee is a trader. The intention with which purchase has been made has to be seen. It is held that if in earlier year, the department has treated the assessee as an ‘investor’, it cannot take a different view in subsequent year. In the case before us, it also observed that in assessment year 20…

DCIT, Chennai vs. Cholamandalam Investment and Finance Company Limited, Chennai

In the result, the appeal of the Revenue in ITA

ITA 1431/CHNY/2014[2001-02]Status: DisposedITAT Chennai28 Apr 2016AY 2001-02

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. Milind S. Kothari, C.AFor Respondent: Shri. Madhukar Bhusari, CIT
Section 139Section 139(5)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

…funds are made out of own funds with minimum risk and also submitted his arguments with the decisions of CIT vs. Associated Industrial Development Co. (P) Ltd (82 ITR 586), Trinetram Consultants (P) Ltd vs. DCIT 34 taxman.com 39, Janak Rangwalla vs. ACIT 11 SOT 627 and prayed for treating the such income as short term capital gain. 4.18. Contra, the ld. Departmental Representative relied on the orders of the lower authorities and opposed to the ground of the assessee. 4.19 We heard the rival submissions and perused the material on record and judicial decisions cited. The only disputed issue in respect of…

Cholamandalam Investment and Finance Company Limited, Chennai vs. ACIT, Chennai

In the result, the appeal of the Revenue in ITA

ITA 1180/CHNY/2014[2005-06]Status: DisposedITAT Chennai28 Apr 2016AY 2005-06

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. Milind S. Kothari, C.AFor Respondent: Shri. Madhukar Bhusari, CIT
Section 139Section 139(5)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

…funds are made out of own funds with minimum risk and also submitted his arguments with the decisions of CIT vs. Associated Industrial Development Co. (P) Ltd (82 ITR 586), Trinetram Consultants (P) Ltd vs. DCIT 34 taxman.com 39, Janak Rangwalla vs. ACIT 11 SOT 627 and prayed for treating the such income as short term capital gain. 4.18. Contra, the ld. Departmental Representative relied on the orders of the lower authorities and opposed to the ground of the assessee. 4.19 We heard the rival submissions and perused the material on record and judicial decisions cited. The only disputed issue in respect of…

ACIT 21(1), Mumbai vs. Nailesh P. Dalal, Mumbai

The appeal of the revenue is dismissed and the cross-objection of the assessee is allowed

ITA 6169/MUM/2014[2010-11]Status: DisposedITAT Mumbai28 Apr 2016AY 2010-11

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Year: 2008-09 Acit-21(1), Shri Nailesh Dalal, 6Th Floor, C-10, 5-6, Viram, 62, बनाम/ Pratyaksh Kar Bhavan, Hatkesh Society, Vs. Bandra Kurla Complex, N. S. Road No.8, Bandra (East) Jvpd Scheme, Mumbai-400051 Mumbai-400049 (राज"व /Revenue ) ("नधा"रती /Assessee) Pan. No.Aacpd9844N Cross Objection No.49/Mum/2016 (Arising Out Of Ita No.6169/Mum/2014) Assessment Year: 2008-09 Shri Nailesh Dalal, Acit-21(1), 5-6, Viram, 62, 6Th Floor, C-10, बनाम/ Hatkesh Society, Pratyaksh Kar Bhavan, Vs. N. S. Road No.8, Bandra Kurla Complex, Jvpd Scheme, Bandra (East) Mumbai-400049 Mumbai-400051 ("नधा"रती /Assessee) (राज"व /Revenue ) Pan. No.Aacpd9844N

…order to maintain the consistency, it is judicially accepted principle that same view should he adopted for the subsequent year, unless there is a material change in the facts. This principle has been followed by Mumbai ITAT in Janak S Rangwala V ACIT 2007 - 11 SOT 627 (Mum.) (Pg.58-60 of APB). vi) That similar issue came up for consideration by the Bombay bench of ITAT Bombay Gymkhana VS. ITO (IT Appeal No. 249 of 2005 pronounced on 31.10.2007). It was held that in the instant case, the real question that came up for consideration was as to whether the first step, i.e. purchase of shares was in the course of tr…

ITO, Ward - 12(4), Kolkata vs. M/S. Manimaya Holdings Pvt. Ltd., Kolkata

In the result the appeal of the revenue is partly allowed for statistical purpose

ITA 439/KOL/2009[2005-06]Status: DisposedITAT Kolkata06 Apr 2016AY 2005-06

Bench: Hon’Ble Shri N.V.Vasudevan, Jm & Shri M.Balaganesh, Am ] Assessment Year : 2005-06

For Appellant: Shri Sallong yaden, Addl.CIT,Sr.DRFor Respondent: Shri Subash Agarwal, Advocate

…borrowed funds on which interest was paid cannot be the basis to decide that the shares so purchased were to be reckoned as stock in trade of business carried out by the assessee. CIT(A) relied on the decision of ITAT Mumbai in the case of S Rangwala vs ACIT 11 SOT 627 (Mum) for the proposition that when shares are held as investment volume of transactions cannot alter the nature of transaction. Based on the decisions referred to above CIT(A) came to the conclusion that gain on sale of shares held by the assessee as investment has to be assessed as capital gain and not as income from business. 8. Aggrieved by t…

DCIT, Circle - 10, Kolkata vs. M/S. H.K. Financiers Pvt. Ltd., Kolkata

In the result, appeal of revenue is dismissed and the CO of the assessee is dismissed as not pressed

ITA 1526/KOL/2010[2006-07]Status: DisposedITAT Kolkata03 Feb 2016AY 2006-07

Bench: Shri Mahavir Singh, Jm & Shri Waseem Ahmed, Am]

For Appellant: Shri R. K. Patodi, FCAFor Respondent: Shri N o n e
Section 143(3)

…ng this issue: CIT V. H. Holck Larsen (1986) 160 ITR 67 (SC) CIT V. Rewashankar A Kothari (2006) 201 CTR 510 (Guj) CIT V. Ramamrithans (2008) 217 CTR 206 (Mad) CIT V. Associated Industrial Development Co. Ltd. (SC) 82 ITR 586 Janak S. Rangwalla V. ACIT (2007) 11 SOT 627 (Mum. Trib.) CIT V. N.S.S. Investments P. Ltd. (2005) 277 ITR 149 (Mad) Bombay Gymkhana Ltd. V. ITO (220) 115 TTJ 639 (Mum. Trib.) Gopal Purohit V. JCIT, 25(3), Mumbai (2009) 29 SOT 117 (Mum.Trib.) Sarnath Infrastructure P. Ltd. V. ACIT (2009) 313 ITR (AT) 13 (Lucknow) DCIT V. Reena Sarogi ITA No. 1202/Cal/98 & 332/Cal/2001) DCIT V. Kavita Parasr…

ACIT, Circle - 31, Kolkata vs. Pradyumna Dalmia, Kolkata

In the result, the appeal of the assessee in ITA No

ITA 1280/KOL/2010[2007-08]Status: DisposedITAT Kolkata20 Jan 2016AY 2007-08

Bench: : Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Sanjay Mukherjee, JCIT, ld. Sr.DRFor Respondent: Shri R.N Bajoria, Sr. Advocate &
Section 143(3)Section 144ASection 14A

…this issue is whether the frequency of transactions would alone indicate the trading activity. In this regard, we find the co-ordinate bench of Mumbai Tribunal had an occasion to consider the same in the case of Janak S. Rangawalla vs ACIT reported in (2007) 11 SOT 627 (Mum), wherein it was held that : “It is the intention of the assessee which is to be seen to determine the nature of transaction conducted by the assessee. Though the investment in shares is on a large magnitude but the same shall not decide the nature of transaction. Similar transactions of sale and purchase of shares in the preceding years hav…

ITO, Ward - 12(1), Kolkata vs. M/S. Lyons & Roses Pvt. Ltd., Kolkata

In the result, the appeal of the revenue in ITA No

ITA 1148/KOL/2009[2005-06]Status: DisposedITAT Kolkata20 Jan 2016AY 2005-06

Bench: : Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Sanjay Mukherjee, JCIT, ld. Sr.DRFor Respondent: Shri R.N Bajoria, Sr. Advocate &
Section 143(3)Section 14A

…this issue is whether the frequency of transactions would alone indicate the trading activity. In this regard, we find the co-ordinate bench of Mumbai Tribunal had an occasion to consider the same in the case of Janak S. Rangawalla vs ACIT reported in (2007) 11 SOT 627 (Mum), wherein it was held that : “It is the intention of the assessee which is to be seen to determine the nature of transaction conducted by the assessee. Though the investment in shares is on a large magnitude but the same shall not decide the nature of transaction. Similar transactions of sale and purchase of shares in the preceding years have…

DCIT 24(2), Mumbai vs. Manoj N. Tekriwal, Mumbai

The appeal of the Revenue is dismissed

ITA 5594/MUM/2012[2008-09]Status: DisposedITAT Mumbai05 Nov 2015AY 2008-09

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year 2008-09 Dy. Cit-24(2), Shri Manoj N. Tekriwal, C-13, 6Th Flr. B-504, Harishchandra Apts. बनाम/ Pratyakshakar Bhavan, Raheja Township, Malad(E), Vs. Bkc, Bandra (East), Mumbai-400097 Mumbai-400051 (राज"व /Revenue) ("नधा"रती /Assessee) Pan. No.Abtpt8105D

Section 143(3)

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ,बी,मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “B”, MUMBAI "ी जो"ग"दर "संह, "या"यक सद"य एवं "ी राजेश कुमार, लेखा सद"य, के सम" Before Shri Joginder Singh, Judicial Member, and Shri Rajesh Kumar, Accountant Member Assessment Year 2008-09 Dy. CIT-24(2), Shri Manoj N. Tekriwal, C-13, 6th flr. B-504, Harishchandra Apts. बनाम/ Pratyakshakar Bhavan, Raheja Township, Malad(E), Vs. BKC, Bandra (East), Mumbai-400097 Mumbai-400051 (राज"व /Revenue) ("नधा"रती /Assessee) PAN. No.ABTPT8105D राज"व क" ओर से / Revenue by Shri Randhir Gupta "नधा"रती क" ओर से / Assessee by Shri G.P.…

Anirudh K. Desai, Mumbai vs. DCIT 19(2), Mumbai

In the result, all the three appeals filed by the assessee are hereby allowed

ITA 8005/MUM/2011[2008-09]Status: DisposedITAT Mumbai30 Oct 2015AY 2008-09

Bench: Shri G.S. Pannu & Shri Sanjay Garg

For Appellant: Shri Bhupendra Shah, A.RFor Respondent: Shri Rajneesh K. Arvind, CIT (D.R.)

…feature of the investment activity. Normally, the act of borrowing funds for purchase of shares is the facet of a business activity, which is absent in this case. Assessee relied on the decision of ITAT, Mumbai Bench in the case of Janak S Rangwalla vs. ACIT [11 SOT 627] for the proposition that the magnitude of investment does not decide the nature of investment. Holding of 80 different stocks which are listed in the stock exchanges shows the diversified portfolio and intention of the assessee for long term holding. As seen from para 4.1 of the impugned order, CiT (A) discussed about the applicability of the CBD…

Anirudh K Desai, Mumbai vs. DCIT 19(2), Mumbai

In the result, all the three appeals filed by the assessee are hereby allowed

ITA 5023/MUM/2011[2005-06]Status: DisposedITAT Mumbai30 Oct 2015AY 2005-06

Bench: Shri G.S. Pannu & Shri Sanjay Garg

For Appellant: Shri Bhupendra Shah, A.RFor Respondent: Shri Rajneesh K. Arvind, CIT (D.R.)

…feature of the investment activity. Normally, the act of borrowing funds for purchase of shares is the facet of a business activity, which is absent in this case. Assessee relied on the decision of ITAT, Mumbai Bench in the case of Janak S Rangwalla vs. ACIT [11 SOT 627] for the proposition that the magnitude of investment does not decide the nature of investment. Holding of 80 different stocks which are listed in the stock exchanges shows the diversified portfolio and intention of the assessee for long term holding. As seen from para 4.1 of the impugned order, CiT (A) discussed about the applicability of the CBD…

Anirudh K Desai, Mumbai vs. DCIT 19(2), Mumbai

In the result, all the three appeals filed by the assessee are hereby allowed

ITA 5022/MUM/2011[2007-08]Status: DisposedITAT Mumbai30 Oct 2015AY 2007-08

Bench: Shri G.S. Pannu & Shri Sanjay Garg

For Appellant: Shri Bhupendra Shah, A.RFor Respondent: Shri Rajneesh K. Arvind, CIT (D.R.)

…feature of the investment activity. Normally, the act of borrowing funds for purchase of shares is the facet of a business activity, which is absent in this case. Assessee relied on the decision of ITAT, Mumbai Bench in the case of Janak S Rangwalla vs. ACIT [11 SOT 627] for the proposition that the magnitude of investment does not decide the nature of investment. Holding of 80 different stocks which are listed in the stock exchanges shows the diversified portfolio and intention of the assessee for long term holding. As seen from para 4.1 of the impugned order, CiT (A) discussed about the applicability of the CBD…

DCIT 16(3), Mumbai vs. Chhaya D. Parikh, Mumbai

The appeal is allowed in favour of the appellant on this issue

ITA 346/MUM/2012[2008-09]Status: DisposedITAT Mumbai28 Oct 2015AY 2008-09

Bench: Shri R.C.Sharma & Shri Pawan Singhassessment Year: 2008-09 Acit- 16(3), Smt. Chhaya D. Parikh, Matru Mandir, 2Nd Floor, 1808, Panchratna, Opera House, R.No. 206, Tardeo Road, Mumbai-400004 Vs. Mumbai-400007 Pan: Aagpp2633Q

For Respondent: Shri Satyapal Kumar (DR)
Section 143(3)

…of appellant involving similar facts, and for the sake of brevity, even though they are taken into consideration for arriving at the conclusion that the appellant, is an investor, the same are not reproduced. However to name a few Janak S. Rangwalla vs. ACIT (11 SOT 627), CIT Vs. Gopal Purohit 228 CTR 582 (Bom.)(2010), CIT Vs. Rohit Anand (2010) 327 ITR 445(Del),DCIT Vs. SMK Shares & Stock Broking Pvt. Ltd. ITA No. 799/Mum/2009,Vinod K. Nevatia ITA No. 6556/Mum/2009 & 181/Mum/2010 and Naishadh V. Vachharajani ITA No. 6429/Mum/2009. 10. In view of the detailed discussion of the facts and considering the legal posi…