ATUL RAMSHARAN GUPTA,NAGPUR V. ACIT, CC-2(2), NAGPUR, NAGPUR

CO 2/NAG/2024

AI Insights

The case involves an appeal by the Dy. Commissioner of Income Tax against Atul Ramsharan Gupta concerning the assessment year 2013-14. The primary issue was the deletion of an addition of Rs.1,90,89,000 made by the Assessing Officer (AO) on account of a sum received from a Keyman Insurance Policy, which was treated as profits in lieu of salary. The CIT(A) had deleted this addition, leading to the Revenue's appeal. The assessee also filed a cross objection. Both parties later requested the withdrawal of their respective appeals and objections due to the monetary limit of the disputed tax being below \'60 lakh.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 24241 (ITAT-NAGPUR)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 05-01-2024
• Other Referred Cases: Shri Vipul Gupta
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDIPKUMAR SALUNKE
• Assessee Lawyers: SHIKHA LOYA
• Keywords: Tax effect; Principle of natural justice; Earning of tax free income
• Section: 143(3); 142(1); 153A; 234B; 10(10D)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.273/Nag./2023 (Assessment Year : 2013–14) Dy. Commissioner of Income Tax Central Circle–2(2), Nagpur ……………. Appellant v/s Atul Ramsharan Gupta 245–E, Rajlaxmi Marg Chitnavis Layout, Civil Lines Nagpur 440 001 PAN – ABQPG8908G ……………. Respondent C.O. no.2/Nag./2024 (Arising out of ITA no.273/Nag./2023) (Assessment Year : 2013–14) Atul Ramsharan Gupta 245–E, Rajlaxmi Marg Chitnavis Layout, Civil Lines Nagpur 440 001 PAN – ABQPG8908G ……………. Cross Objector (Original Respondent) v/s Dy. Commissioner of Income Tax Central Circle–2(2), Nagpur ……………. Respondent (Original Appellant) Assessee by : Ms. Shikha Loya Revenue by : Shri Sandipkumar Salunke Date of Hearing – 27/11/2024 Date of Order – 28/11/2024 O R D E R PER V. DURGA RAO, J.M. The appeal by the Revenue and cross objection by the assessee are against the impugned common order dated 19/06/2023, passed by the 2 Atul Ramsharan Gupta ITA no.273/Nag./2023 C.O. no.2/Nag./2024 learned Commissioner of Income Tax (Appeals)–3, Nagpur, [“learned CIT(A)”], for the assessment year 2013–14. 2. The Revenue in its appeal has raised following grounds:– “1. On the fact and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs.1,90,89,000/- made by the AO on account of sum received including bonus on immature surrender of 'Keyman Insurance Policy' as profits in lieu of salary. 1 2. On the fact and in the circumstances of the case, the Ld. CIT(A) has erred in considering the Keyman Insurance Policy assigned as Ordinary Insurance Policy to the assessee without appreciating the fact that the assessee has nowhere mentioned in the return of income filed for the A.Y. 2013-14 about the amount received from LIC as exempt income u/s 10(10D) of the Income Tax Act. The amount received from LIC i.e. Rs.1,90,89,000/- is not a meagre amount. If the Keyman Insurance Policy was assigned as Ordinary Insurance Policy then being a prudent and key person of the company, the assessee must have mentioned the amount received from LIC in his return of income filed for A.Y. 2013-14 as Exempt income. Further, there is no direct payment of consideration for purchase of policy, assignment of policy and Receipt of policy amount, hence, the facts regarding source of purchase of policy and receipt of policy amount has been circumvented. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in comparing the assessee case which is related to the scrutiny assessment, with the case of other group concerns specifically the case of Shri Vipul Gupta related to the ITSC, which requires the income of the assessee which has not been disclosed before Assessing Officer, deleting addition of Rs.1,90,89,000/-. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding the action of AO in invoking the provisions of section 17(3)(ii) & taxing the gross surrender value as improper and holding the appellant that he has rightly claimed the exemption of amount received u/s 10(10D), without appreciating the reasoning given by AO, on addition of policy amount received, by way of the Finance (No.2) Act, 1996 and CBDT Circular No. 762 dated 18.02.1998. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding action of the AO as ultravirus of section 153A and unjustified, finding that the AO has neither unearthed any incriminating documents during search nor any such incriminating documents have been relled upon by him for making the impugned addition u/s 153A, without appreciating that the addition of Rs.1,90,89,000/- was made on account of search action which was sequenced by issue of notice u/s 153A, filing of ITR in response to notice u/s 153A without giving details of receipt of Keyman Insurance Policy on which claiming exemption u/s 10(10D) and detecting of income of Rs.1,90,89,000/- due to issue of notice u/s 142(1) of the I.T. Act. 3 Atul Ramsharan Gupta ITA no.273/Nag./2023 C.O. no.2/Nag./2024 6. On the facts and in the circumstances of the case, the Lid. CIT(A) has erred in considering action of AO as ultravirus of section 153A and unjustified, indirectly allowing them additional ground of the assessee without giving opportunity to the AO. 7. Any other ground that may be raised during the course of appellate proceedings. 3. The assessee raised following grounds in its cross objection:– “(1) That the order of the Asstt Commissioner of Income Tax, Central Circle 2(2) passed u/s. 143(3) r.w.s. 153A is bad in law and wrong on facts and the learned CIT(A) is justified in deleting the additions made therein. (2) That the learned Assessing Officer erred in law and on facts in issuing notice and making addition u/s. 153A of the Income Tax Act, even- though no material or evidence of incriminating nature was found as a result of search action so as to base such additions. On the facts and circumstances of the case, the action of the AO in making addition neither related to nor arising out of incriminating documents, and merely based on regular entries in the books of accounts is contrary to the legislative intent of section 153A, hence unjustified. (3) That the learned C.I.T.(A) has erred in not adjudicating the additional legal grounds of appeal raised before him. On the facts and circumstances of the case and in law, the action of the learned CIT(A) in not adjudicating the legal grounds raised is against the principles of natural justice and hence unjustified. (4) That the AO erred in law and on facts in disallowing the claim of assessee of exemption u/s. 10(10D) of amount received from Life Insurance Policy and further erred in invoking provisions of section 17(3)(ii) and making addition of Rs. 1,90,89,000/- being amount received on surrender of the Life Insurance Policy assigned to appellant. The learned CIT(A) was justified in allowing the claim of exemption claimed and deleting the addition. On the facts and circumstances of the case, the action of the AO was bad in law and wrong on facts and the learned CIT(A) was justified in setting aside the same. That the learned AO erred in law and on facts in not taking cognizance of the order passed by the Hon'ble Settlement Commission in case of brother of appellant, Shri Vipul Gupta, wherein exactly identical issue has been examined and dealt by the Settlement Commission and the CIT(A) was justified in taking into consideration the said order of Settlement Commission while passing his appellate order. On the facts of the case, the action of the learned AO is against the principles of judicial discipline and hence unjustified. (6) That the learned AO erred in law and on facts in making the addition of Rs. 2,16,175/- being interest on service tax holding that the same is not allowed u/s. 57 and CIT(A) was justified in deleting the addition made. On the facts and circumstances of the case, the action of the AO is based on conjectures 4 Atul Ramsharan Gupta ITA no.273/Nag./2023 C.O. no.2/Nag./2024 and surmises and highly unjustified and the learned CIT(A) was justified in setting aside the same. (7) That the learned CIT(A) erred in not adjudicating the ground no. 3 raised before him with regard to levy of interest u/s. 234A, 234B and 234C, citing that the same is general in nature. The ground challenging the levy of interest is specific and not general and the action of authority in summarily rejecting the same is unjustified. (8) That for any other cross-objection with kind permission of Hon'ble Members at the time of hearing of cross objection.” 2. At the outset, the leaned Departmental Representative appearing for the Revenue submitted that the tax effect on the amount disputed by the Revenue is below the revised monetary limit of ` 60 lakh and, hence, he wish to withdraw its appeal. 3. Per–contra, the learned A.R. appearing for the assessee submitted that she may be permitted to withdraw the cross objection filed by the assessee. 4. Having heard the arguments of rival parties, perused the material available on record and gone through the orders of the authorities below, we are of the view that the tax effect on the amount disputed by the Revenue in its appeal and the cross objection filed by the assessee which is in support of the appeal filed by the Revenue, the disputed taxable amount are below the revised monetary limit of ` 60 lakh. Since both the parties have requested for withdrawal of its appeal and cross objection respectively, the Revenue’s appeal and assessee’s cross objection are treated as withdrawn and hence liable to be dismissed. 5 Atul Ramsharan Gupta ITA no.273/Nag./2023 C.O. no.2/Nag./2024 5. In the result, appeal by the Revenue and cross objection by the assessee are dismissed. Order pronounced in the open Court on 28/11/2024 Sd/- K.M. ROY ACCOUNTANT MEMBER Sd/- V. DURGA RAO JUDICIAL MEMBER NAGPUR, DATED: 28/11/2024 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "