While considering a bunch of appeals the Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that share trading through Benami can’t be claimed as a business loss by the assessee and upheld the denial of the above-said claim by the CIT(A).
The assessee was represented by Shri Aseem Thakkar and revenue was represented by Shri Jamesh Kurian and Shri Rakesh Jha.
The assessee, Shri Mukesh Rasiklal Shah (“MRS”) claimed business loss indulging in share trading transactions. The revenue stated that this share trading business was the Benami of “SG” and not of the assessee, and therefore denied claim of loss.
It was observed that the balance sheet of the assessee does not give any picture that the business was being run by the assessee himself. The capital of the proprietor was shown as only Rs.15,000/-, out of the total balance sheet value of Rs.6.68 crores and the majority of the money has come from trade depositors of Rs.6.61 crores. The balance sheet failed to show a position that the business belonged to the assessee.
Further viewed that the entire business was financed from the deposits from outsiders and the assessee was a man of no means at all to have attracted such deposits, the business could not be attributed to the assessee.
The Tribunal found that the assessee had not carried on any business but in fact, it was the Benami of Shri Suresh U. Gadhecha.
Smt. Annapurna Gupta, accountant member and Smt. Suchitra Kamble, judicial member upheld the order of the CIT(A) that the business of share trading transactions carried on in the proprietorship concern was not that of the assessee, but Benami and denial of the claim of business loss to the tune of Rs.4,13,11,931/- was upheld. The appeal of the assessee got dismissed.
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