Accordingly, Gambhir will miss the final Test of the current series against Australia, starting in Nagpur on November 6.
Justice Sachs reached his verdict after studying video footage, documentary records and written submissions.
Gambhir had been banned for one Test by match refree Chris Broad last Friday after he pleaded guilty to a charge under Rule C1 of the Code (Level 2) which states that players shall at all times conduct play within the spirit of the game.
Gambhir banned for one Test match
Justice Sachs, in his verdict, said, ''I am prepared to accept that he (Gambhir) had been the victim of prolonged and persistent verbal abuse by members of the Australian team, culminating in a moment of anger that led to his unfortunate lapse.
''(But) cricket is not a contact sport. Small collisions can lead to big ones. Players must constantly be on guard to avoid physical contact with opposition players. The risk of accidental collision must be cut down. Deliberate collision can never be condoned, however, grave the provocation.
''Accordingly, while not without sympathy for Gautam Gambhir, I cannot find that the penalty imposed on him is so disproportionately severe that I should intervene. He concedes that what he did was unacceptable. It was not the first time.
Millions of people saw it. Though his excellence does not require him to be better behaved than mediocre players, it does not give him immunity from the rules of the Code of Conduct. The cricketing world is entitled to expect from him and all cricketers the highest standards.
Gambhir, Watson come close to face off
'The rules against actual or threatened violence against opponents must be strictly enforced. The appeal must fail. The penalty stands.'' Following the judgment ICC Chief Executive Haroon Lorgat said, ''the ICC Code of Conduct is a robust and independent process designed to achieve a fair and proper outcome.
''Although we have received an objection letter from the BCCI, there is nothing more that we can do as the Appeal Commissioner's decision is a final and binding decision.
''The matter is now closed and the ICC will make no further comment on the case.'' After Justice Sachs reached his decision, he provided it in writing to ICC Head of Legal David Becker, who forwarded it to Gambhir, Broad and ICC Chief Executive Haroon Lorgat.
Under the provisions of the ICC Code of Conduct, Justice Sachs had the power to increase, decrease, amend or otherwise substitute his own decision from that made at the previous hearing, and his decision is final and binding.
Also, in line with a recent decision by the ICC Board to amend the Code of Conduct, Gambhir will bear the cost of the appeal as it was not successful.
The incident that led to the charge being laid took place during the 51st over of India's first innings on day one of the Test match when there was a coming-together of Gambhir and Shane Watson of Australia.
Watson was found guilty and fined 10 per cent of his match fee on Thursday for verbally engaging with Gambhir in a manner that was not in keeping with the Spirit of Cricket.