Commissioner Of Income Tax-12 v. Dr. Vijaypath Singhania

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APEAL NO.6063 OF 2010 Commissioner of Income Tax-12.V. Dr. Vijaypath Singhania. ..Appellant. ..Respondent. Mr. Suresh Kumar for the Appellant. Mr. S. E. Dastur, Sr. Counsel with Pankaj R. Toprani for the Respondent. CORAM : J.P. DEVADHAR & M.S. SANKLECHA, JJ.DATE : 25[th] September, 2012. PC: Two questions of law raised in this appeal read thus: (a)Whether on the facts and in the circumstances of the case and in law, the sale prices of horses as declared by the assessee can be estimated by the Assessing officer based on the records of sale of horses as declared by the other assessee when the sale proceeds shown by the assessee is abysmally low? (b)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in treating the loss on sale of horses as capital loss and not business loss when the assessee is regularly engaged in the breeding and maintaining of race horses? 2)As regards the first question is concerned, the Tribunal after recording its reasons in Paragraphs 13 to 15 has arrived at the conclusion that the observations made by the Assessing Officer regarding the sale price of the horses were totally based on suspicion and surmises. The finding of fact recorded by the CIT(A) and confirmed by the ITAT is that the fact that different types of horses are sold by different persons to different persons at different prices cannot be compared with the sale price of the horses sold by the assessee. Therefore, the decision of the Tribunal that the price declared by the assessee is the actual price received the assessee would be a finding of fact. Hence, the first question cannot be entertained. 3)As regards the second question is concerned, the finding of fact recorded by the CIT(A) is that horses sold by the assessee were owned and maintained by the assessee and gains/losses arising on sale of similar horses owned and maintained by the assessee were considered as capital gains/losses under the head long term or short term capital gains/losses. Therefore, the fact that the assessee was also engaged in the business of breeding and maintaining race horses cannot be a ground to deny capital losses arising on sale of horses owned and maintained by the assessee especially when such losses/gains have been regularly allowed in the past. The second question therefore, cannot be entertained. The appeal is accordingly dismissed. No order as to costs. ( M.S. SANKLECHA, J.) ( J.P. DEVADHAR, J.)