Mrs. Sheila Jain (Dhody), New Delhi V. ACIT, New Delhi

CO 148/DEL/2013

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3687 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 14-06-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 09-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMIT JAIN SENIOR
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4316/DEL./2012 (ASSESSMENT YEAR : 2003-04) ACIT, CIRCLE 22 (1), VS. MRS. SHEILA JAIN (DHODY), NEW DELHI. PROP. M/S. HOLIDAY & M/S. GREAT INDIAN HOLIDAY, C 62, FRIENDS COLONY (EAST), NEW DELHI. (PAN : AAFPD2633P) CO NO.148/DEL/2013 (IN ITA NO.4316/DEL./2012) (ASSESSMENT YEAR : 2003-04) MRS. SHEILA JAIN (DHODY), VS. ACIT, CIRCLE 22 (1), PROP. M/S. HOLIDAY & M/S. GREAT NEW DELHI. INDIAN HOLIDAY, C 62, FRIENDS COLONY (EAST), NEW DELHI. (PAN : AAFPD2633P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY WADHWA, ADVOCATE REVENUE BY : SHRI AMIT JAIN, SENIOR DR DATE OF HEARING : 19.04.2018 DATE OF ORDER : 23.04.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : ITA NO.4319/DEL./2012 CO NO.148/DEL./2013 2 THE AFORESAID APPEAL FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. THE APPELLANT, ASSISTANT COMMISSIONER OF INCOME- TAX, CIRCLE 22 (1), NEW DELHI (HEREINAFTER REFERRED TO A S THE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE T HE IMPUGNED ORDER DATED 14.05.2012 PASSED BY LD. CIT (APPEALS)-XXV, NEW DELHI QUA THE ASSESSMENT YEAR 2003-04 ON THE GROUNDS INTE R ALIA THAT :- 1. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS.37,22,880/- MADE UNDER THE HEAD UTI INCOME. 2. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.2,52,000/- MADE UNDER THE HEAD DEEMED RENTAL INCOME. 3. THE OBJECTOR, MRS. SHEILA JAIN (DHODY), BY FILIN G THE PRESENT CROSS OBJECTIONS CHALLENGED THE ASSESSMENT ORDER DA TED 20.03.2006 PASSED BY THE ASSESSING OFFICER QUA THE ASSESSMENT YEAR 2003-04 ON THE GROUNDS INTER ALIA THAT :- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (A) IS BAD IN LAW AND ON FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E LD. COMMISSIONER OF INCOME' TAX, NEW DELHI HAS ERRE D IN CONFIRMING THE DISALLOWANCE OF INLAND TRAVELLING EXPENSES OF RS.62,498/- MADE BY ID. ASSESSING OFFIC ER ON THE GROUND THAT THESE EXPENSE ARE PERSONAL IN NA TURE ITA NO.4319/DEL./2012 CO NO.148/DEL./2013 3 INSPITE OF THE FACT THAT THESE EXPENSES ARE FOR BUS INESS PURPOSE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E LD. COMMISSIONER OF INCOME TAX, NEW DELHI HAS ERRED IN CONFIRMING THE DISALLOWANCE OF FOREIGN TRAVELLIN G EXPENSES OF RS.272,702/ MADE BY ID. ASSESSING OFFIC ER ON THE GROUND THAT THESE EXPENSE ARE PERSONAL IN NA TURE INSPITE OF THE FACT THAT THESE EXPENSES ARE FOR BUS INESS PURPOSE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E LD. COMMISSIONER OF INCOME TAX, NEW DELHI HAS ERRED IN HOLDING THE DEDUCTION U/S 80HHC OF THE INCOME TA X ACT, 1961 AT RS.22,85,949/- INSTEAD OF RS.25,85,964 /-. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ASSESSEE CLAIMED TO HAVE PURCHASED UNIT TRUST OF INDIA UNITS (MIP) OF RS.40,00,000/- IN 199 7 AND GOT IT ENCASHED ON MATURITY FOR RS.77,22,880/- ON 05.07.20 02 WHICH WAS CREDITED INTO HER ACCOUNT. AO MADE ADDITION OF RS. 37,22,880/- BY TREATING THE SAME AS INTEREST INCOME OVER INVESTMEN T OF RS.40,00,000/-. AO FURTHER MADE ADDITION OF RS.2,5 2,000/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY UNDER SECTION 23 (4)(B) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) FOR THE REASON THAT THE ASSESSEE IS HAVING TWO HOUSES. 5. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED BOTH THE AFORESAID ADDI TIONS MADE BY THE AO BY PARTLY BY ALLOWING THE APPEAL. FEELING AG GRIEVED, THE ITA NO.4319/DEL./2012 CO NO.148/DEL./2013 4 REVENUE AS WELL ASSESSEE HAVE COME UP BEFORE THE TR IBUNAL BY WAY OF FILING THE PRESENT APPEAL AND CROSS OBJECTIONS. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. REVENUES APPEAL - ITA NO.4319/DEL/2012 GROUND NO.1 7. UNDISPUTEDLY, THE ASSESSEE HAS MADE INVESTMENT O F RS.40,00,000/- IN 1997 IN UTI UNITS (MIP) WHICH GOT ENCASHED ON MATURITY FOR RS.77,22,880/- ON 05.07.2002. IT IS A LSO NOT IN DISPUTE THAT THE ACCOUNTS OF THE ASSESSEE ARE ALSO AUDITED BY A STATUTORY AUDITOR U/S 44AB OF THE ACT. AO MADE ADDITION OF R S.37,22,880/- FOR THE REASON THAT SINCE THE ASSESSEE HAS OPTED FO R CUMULATIVE GROWTH OPTION AND SHE HAS RECEIVED THE INTEREST OF RS.37,22,880/- WHICH SHE HAS NOT DISCLOSED IN HER RETURN. 8. HOWEVER, WHEN WE EXAMINE PAGES 1 TO 3 OF THE PAP ER BOOK WHICH IS RETURN FOR AY 2003-04 WITH COMPUTATION OF TAXABLE INCOME, IT SHOWS THAT THE ASSESSEE HAS OFFERED DIVI DEND INCOME OF RS.2,55,369/- TO TAX IN THE RELEVANT ASSESSMENT YEA R ON WHICH TDS ITA NO.4319/DEL./2012 CO NO.148/DEL./2013 5 OF RS.26,814/- WAS ALSO DEDUCTED. SIMILARLY, WHEN WE EXAMINE PAGE 36 OF THE PAPER BOOK IT SHOWS THAT IN FYS 1999 -00, 2000-01 AND 2001-02 NO TDS WAS DEDUCTED AS IT WAS NOT REQUI RED UNDER LAW FOR THOSE YEARS. THIS FACT SHOWS THAT THE ASSE SSEE HAS BEEN MAINTAINING HER BOOKS OF ACCOUNT ON MERCANTILE BASI S AND HAS REGULARLY DECLARED DIVIDEND INCOME/PROCEEDS IN THE RETURN OF INCOME ON ACCRUAL BASIS IN THE RESPECTIVE YEARS. I N THESE CIRCUMSTANCES, THE INCOME ARISEN FROM MATURITY OF U TI UNITS (MIP) CANNOT BE TREATED AS INTEREST INCOME. 9. LD. CIT (A) HAS EXAMINED ALL THESE FACTS AND HAS SPECIFICALLY ANNEXED COMPUTATION OF TAXABLE INCOME FOR AY 2003-0 4 AS ANNEXURE A WITH THE IMPUGNED ORDER AND COPY OF LE TTER ISSUED BY UTI TECHNOLOGY SERVICES LTD. AS ANNEXURE B REGARD ING NON- RECEIPT OF INCOME GROWTH STATEMENT FOR THE PERIOD 0 1.04.1999 TO 31.03.2002 CERTIFYING THAT THE INCOME DECLARED UNDE R CUMULATIVE OPTION AND FURTHER REINVESTED IN THE CAPTIONED FOLI O NUMBER. SO WHEN IT IS NOT IN DISPUTE THAT THE INVESTMENT MADE BY ASSESSEE IN UTI WAS UNDER DIVIDEND REINVESTMENT SCHEME AND THE ASSESSEE HAS ALREADY DECLARED HER INCOME IN THE RESPECTIVE YEARS , DIVIDEND INCOME CANNOT BE TREATED AS INTEREST INCOME. SO, W E ARE OF THE CONSIDERED VIEW THAT THE LD. CIT (A) BY EXAMINING A LL THESE FACTS ITA NO.4319/DEL./2012 CO NO.148/DEL./2013 6 HAVE RIGHTLY DELETED THE ADDITION OF RS.37,22,880/- MADE BY THE AO. SO, GROUND NO.1 IS DETERMINED AGAINST THE REVE NUE. GROUND NO.2 10. SO FAR AS QUESTION OF ADDITION OF RS.2,52,000/- MADE BY THE AO AND DELETED BY THE LD. CIT (A) IS CONCERNED, IT IS THE CATEGORIC CASE OF THE ASSESSEE THAT HER PROPERTY SITUATED AT HAUZ KHAS IS BEING USED FOR BUSINESS PURPOSE AND PROPERTY SITUAT ED AT GOA IS UNDER CONSTRUCTION. ALL THESE FACTS ARE SUBSTANTIA TED FROM THE BALANCE SHEET RELIED UPON BY THE ASSESSEE. WHEN BO OKS OF ACCOUNT AND AUDITED BALANCE SHEET RELIED UPON BY THE ASSESS EE HAVE NOT BEEN DISPUTED BY THE AO THE GOA PROPERTY UNDER CONS TRUCTION CANNOT BE SUBJECTED TO DEEMING PROVISIONS CONTAINED U/S 23(4)(B) PARTICULARLY WHEN PROPERTY OF HAUZ KHAS IS USED FOR BUSINESS PURPOSES. SO, WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED BY THE LD. CIT (A) AND GROUND NO.2 IS DETE RMINED AGAINST THE REVENUE. ASSESSEES CO NO.148/DEL/2013 11. LD. AR FOR THE ASSESSEE WHILE PRESSING THE CROS S OBJECTION FOR DISALLOWANCE OF INLAND TRAVELLING EXPENSES OF R S.62,498/-, ITA NO.4319/DEL./2012 CO NO.148/DEL./2013 7 FOREIGN TRAVELLING EXPENSES OF RS.2,72,702/- AND AL LOWING DEDUCTION OF RS.22,85,949/- INSTEAD OF RS.25,85,964 /- UNDER SECTION 80HHC, CONTENDED THAT THE ASSESSEE HAS NOT MUCH TO SAY ABOUT THESE ADDITIONS. WE ARE OF THE CONSIDERED VI EW THAT SINCE THE LD. CIT (A) HAS DEALT WITH ALL THESE ISSUES RAISED IN THE CROSS OBJECTIONS METICULOUSLY ON THE BASIS OF FACTS AND C IRCUMSTANCES OF THE CASE, CROSS OBJECTIONS FILED BY THE ASSESSEE AR E HEREBY DISMISSED. 12. RESULTANTLY, BOTH THE APPEAL FILED BY THE REVEN UE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF APRIL, 2018. SD/- SD/- (N.K. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 23 RD DAY OF APRIL, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.