Sh. U.K. Bose, Lucknow V. DCIT, New Delhi

CO 282/DEL/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 5935 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 02-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 02-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 26-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Keywords: Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3705 TO 3707/DEL/2010 ASSESSMENT YEARS : 2003-04, 2005-06 & 2006-07 DCIT, CENTRAL CIRCLE-6, ROOM NO.334, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI. VS. U.K. BOSE, 1, KAPOORTHALA COMPLEX, ALIGANJ, LUCKNOW. PAN : ACQPR9786L(ITA NO.3705/D/10) PAN : AFSPB1277H (ITA NO.3706 & 3707/D/2010) C.O.NOS.281 TO 283 /DEL/2010 (ITA NOS.3705 TO 3707/DEL/2010) ASSESSMENT YEARS : 2003-04, 2005-06 & 2006-07 U.K. BOSE, 1, KAPOORTHALA COMPLEX, ALIGANJ, LUCKNOW. PAN : ACQPR9786L (CO NO.281/D/10) PAN : AFSPB1277H (CO NOS.282 & 283/D/2010) VS. DCIT, CENTRAL CIRCLE-6, ROOM NO.334, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DINESH VERMA, ADVOCATE REVENUE BY : MS SRUJANI MOHANTY, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THE APPEALS ARE FILED BY THE REVENUE AND THE CROSS OB JECTIONS BY THE ASSESSEE. ALL OF THEM ARE DIRECTED AGAINST THE CONSO LIDATED ORDER PASSED BY THE CIT (A) DATED 14 TH MAY, 2010 FOR ASSESSMENT YEARS ITA NOS.3705 TO 3707/DEL/2010 CO NOS.281 TO 283/DEL/2010 2 2003-04, 2005-06 & 2006-07. THE GROUNDS OF APPEAL I N ALL THE APPEALS ARE IDENTICAL AND FOR THE SAKE OF CONVENIENCE, THE G ROUNDS OF APPEAL FOR ASSESSMENT YEAR 2003-04 ARE REPRODUCED BELOW:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD . CIT (A) HAS ERRED IN :- 1. THE ORDER OF THE LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION TOWARDS PERQUISITES ON ACCOUNT OF RE-IMBURSEMENT OF TELEPHONES AND MOBILE BILLS WHEREAS THE PERSONAL USE OF THE SAME IS EMBEDDED IN SUCH BILLS. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION TOWARDS PERQUISITES ON ACCOUNT OF VARIOUS CLUB MEMBERSHIPS FOR WHICH RE-IMBURSEMENT HAS BEEN MADE B Y THE EMPLOYER. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 2. SIMILARLY, GROUNDS OF CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALSO IDENTICAL AND, FOR THE SAKE OF CONVENIENCE, GROU NDS OF CROSS OBJECTIONS FOR ASSESSMENT YEAR 2003-04 ARE REPRODUCED B ELOW:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW THE LD. CIT (A) IS FULLY JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER FOR ALLEGED PERQUISITE VALUE OF TELEPHONE AND MOBILE EXPENSES AND CLUB MEMBERSHIP FE E MORE PARTICULARLY WHEN THE SAME WERE PROVIDED TO THE RESPOND ENT BY THE EMPLOYER FOR OFFICIAL PURPOSES. 2. THAT THE RESPONDENT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW GROUND OF CROSS-OBJECTIONS ON OR BEFORE THE D ATE OF HEARING. 3. THE ISSUE INVOLVED IN THE PRESENT APPEALS ARE IDENTI CAL. FOR THE SAKE OF CONVENIENCE, THE FACTS RELATING TO ASSESSMENT YEA R 2003-04 WILL BE DISCUSSED AND THE DECISION TAKEN THEREON WILL B E APPLICABLE TO ITA NOS.3705 TO 3707/DEL/2010 CO NOS.281 TO 283/DEL/2010 3 OTHER ASSESSMENT YEARS. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ONLY SUPPORTING THE ORDER OF THE CIT (A). 4. FOR ASSESSMENT YEAR 2003-04, THE RETURN OF INCOME WA S FILED BY THE ASSESSEE AT AN INCOME OF ` 19,87,940/-. ACCORDING TO FORM NO.16, THE PERQUISITES WHICH ARE ADDED TO THE SALARY INCOME O F THE ASSESSEE WERE DISCLOSED AS UNDER:- 1. RENT FREE ACCOMMODATION 3,38,549 2. MOTOR CARS 21,600 3. ELECTRICITY 49,495 4. DOMESTIC SERVANTS 30,000 5. GUARDS 54,000 4,93,644 5. THE ASSESSING OFFICER BEING NOT SATISFIED WITH THE VAL UATION OF THOSE PERQUISITES HAS ADDED A FURTHER SUM TO THE SALARY I NCOME DISCLOSED BY THE ASSESSEE, THE DETAILS OF WHICH ARE AS UNDE R:- 1. DOMESTIC SERVANT RS.78,000/- 2. SECURITY GUARD RS.1,86,000/- 3. TELEPHONE & CELLULAR RS.97,969/- 4. CLUB MEMBERSHIP RS.2,68,018/- TOTAL RS.6,29,987/- 6. THEREFORE, AN ADDITION OF ` 6,29,987/- WAS MADE T O THE INCOME OF THE ASSESSEE. AGAINST SUCH ADDITION, AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE CIT (A). 7. LD. CIT (A) HAS TABULATED THE ADDITIONS MADE BY TH E ASSESSING OFFICER IN THE YEARS UNDER CONSIDERATION WHICH ARE AP ART FROM THE AMOUNTS ADDED BY THE ASSESSEE HIMSELF. A.Y. 2003-04 A.Y.2005-06 A.Y.2006-07 DOMESTIC SERVANT 78,000/- 78,000 1,24,000 SECURITY GUARD 1,86,000/- 1,86,000 2,40,000 CHAUFFEUR DRIVEN CAR NIL 48,000 2,64,000 TELEPHONE EXPENSES 97,969 61,420 24,606 CLUB MEMBERSHIP 2,68,018 2,68,018 2,68,018 TOTAL 6,29,987 6,41,438 9,20,624 ITA NOS.3705 TO 3707/DEL/2010 CO NOS.281 TO 283/DEL/2010 4 8. IT WAS PLEADED BEFORE THE CIT (A) THAT THE REVENU E HAS BEEN ADDING PERQUISITES ON ESTIMATE BASIS FROM YEAR TO YEAR F OR THE LAST SEVERAL YEARS AND THERE IS NO CHANGE IN THE FACTS AND C IRCUMSTANCES OF THE CASE AS THESE PERQUISITES HAVE BEEN ESTIMATED WITHOUT ANY MATERIAL ON RECORD AND THE ADDITIONS ARE MADE ON THE BASIS OF CONJECTURES AND SURMISES. IT WAS SUBMITTED THAT THE ISSUE REGARDING TAXABILITY OF THESE PERQUISITES HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 1998-99, 2001-02 AND 2002-03 AND REFERENCE WAS MADE TO THE FOLLOWING DECI SIONS:- 1. ITA NO.1887, 1501, 1502 AND 1503/DEL/2008 FOR THE A.Y. 1995-96, A.Y. 1999-2000 TO 2001-02 DATED 12.06.2009. 2. ITA NO.1889/D/2008 FOR THE A.Y. 2002-03 DATED 30.0 6.2009. 9. IT WAS FURTHER SUBMITTED THAT FOR ASSESSMENT YEAR 2002 -03 WHILE UPHOLDING THE ACTION OF THE CIT (A) VIDE WHICH THE AFOREMENTIONED ADDITIONS WERE DELETED, THE OBSERVATIONS OF THE TRIBUN AL AS CONTAINED IN PARA 10 AND 11 WERE AS UNDER:- BY FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE A.Y. 1 998-99, THE TRIBUNAL VIDE ITS ORDER DATED 12.6.2009 FOR THE A.Y. 1 999-2000, 2000-01 AND 2001-02 CONFIRMED THE ACTION OF THE CIT (A ) FOR DELETING THE SIMILAR ADDITION ON ACCOUNT OF ADDITION FOR PERQUISITES. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W AND FOUND THAT THE TRIBUNAL HAD CONSIDERED THE ADDITIONS MAD E ON ACCOUNT OF PERQUISITES RELATING TO SERVANT, WATCHMAN, ELE CTRICITY EXPENSES, CHAUFFEUR DRIVEN CAR, FOREIGN TRAVEL, CLUB MEMBERSHIP, PROFESSIONAL FEES, ETC. SIMILAR ADDITION EXCEPT ADDITI ON ON ACCOUNT OF RENT FREE ACCOMMODATION WAS MADE DURING THE YEAR UNDER CONSIDERATION. SINCE THE ESTIMATION OF VALUE OF PERQUISITES EXCEPT RENT FREE ACCOMMODATION HAS BEEN CONSISTENTLY DEALT WITH BY THE TRIBUNAL IN THEIR RESPECTIV E ORDERS MENTIONED HEREIN ABOVE RESPECTFULLY FOLLOWING THE SAME WE CONFIRM THE ACTION OF THE CIT (A) AS THE FACTS AND CIRCU MSTANCES DURING THE YEAR ARE SAME. IN THE PRESENT CASE WE FIND THAT THE ADDITIONS IN RESPEC T OF PERQUISITE VALUE TOWARDS ELECTRICITY EXPENSES, RENT FREE ITA NOS.3705 TO 3707/DEL/2010 CO NOS.281 TO 283/DEL/2010 5 ACCOMMODATION, VALUE OF DOMESTIC SERVANT, SECURITY GUAR D, TELEPHONE AT RESIDENCE, CHAUFFEUR DRIVEN CAR AND OTHER AMENITIES, CLUB MEMBERSHIP AND IN RESPECT OF FOREIGN TRAVEL UNDERTAKEN BY THE ASSESSEE. HOWEVER, WE FIND THAT ALL THESE ADDITIONS WERE MADE WITHOUT VERIFYING THAT THE COMPANY HA S INCURRED SUCH EXPENSES BY WAY OF PROVIDING PERQUISI TES TO THE ASSESSEE AND NOT INCURRED BY THE COMPANY IN THE COURSE OF CARRYING ON OF BUSINESS. THE ADDITIONS WERE MADE ON ESTIMATE BASIS. SINCE THE FACTS ARE IDENTICAL IN THE CASE OF THE ASSESSEE FOR THE A.Y. 1998-99 WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE CIT (A). 10. IT WAS SUBMITTED THAT IN THE AFOREMENTIONED CASES A LSO THE CIT (A) HAD DELETED THE ADDITIONS. 11. IT WAS FURTHER SUBMITTED THAT IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2004-05 NO ADDITION WAS MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF ESTIMATED PERQUISITES IN THE HAN DS OF THE ASSESSEE WHEREAS THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SAME AND IDENTICAL AND, THUS, IT WAS PLEADED THAT THE ISSUE RAISED IN THE PRESENT APPEALS ARE SIMILAR AND, THEREFORE, ACCORDING TO THE AFOREMENTIONED ORDERS OF THE TRIBUNAL, NO ADDITION W AS CALLED FOR. LD. CIT (A) HAS DELETED THE ADDITION FOLLOWING THE AFORE MENTIONED ORDERS OF THE TRIBUNAL. THE DEPARTMENT IS AGGRIEVED, HENCE, I N APPEAL. 12. AFTER NARRATING THE FACTS, RELYING UPON THE ORDE R OF THE ASSESSING OFFICER, IT WAS PLEADED BY LD. DR THAT THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND IT HAS WRONGLY BEEN DELETED BY THE CIT (A). SHE SUBMITTED THAT THE ORDER OF THE CIT (A) SHOULD B E SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 13. ON THE OTHER HAND, RELYING UPON THE ORDER PASSED BY THE CIT (A) IT WAS PLEADED BY LD. AR THAT THE ISSUE RAISED IN THE P RESENT APPEALS BY THE REVENUE ARE SQUARELY COVERED BY THE AFOREMENTION ED DECISIONS OF THE TRIBUNAL AND, THUS, LEARNED CIT (A) HAS RIGHTLY G RANTED THE RELIEF TO THE ASSESSEE AND HIS ORDER SHOULD BE UPHELD. ITA NOS.3705 TO 3707/DEL/2010 CO NOS.281 TO 283/DEL/2010 6 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS I N THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER YEARS HAS ALREAD Y BEEN REPRODUCED. THE LD. CIT (A) HAS GRANTED THE RELIEF TO THE ASSESSEE ON THE BASIS OF EARLIER DECISIONS OF ITAT IN THE CASE OF TH E ASSESSEE HIMSELF. THEREFORE, WE FIND NO INFIRMITY IN THE ORD ER OF THE CIT (A) VIDE WHICH THE RELIEF HAS BEEN GRANTED TO THE ASSESSEE. THER EFORE, WE DECLINE TO INTERFERE IN THE RELIEF GRANTED BY THE C IT (A) TO THE ASSESSEE AND THE DEPARTMENTAL APPEALS ARE DISMISSED. 15. AS WE HAVE UPHELD THE ORDER OF THE CIT (A) AND T HE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ONLY SUPPORTING THE ORDER OF THE CIT (A), THEY HAVE BECOME INFRUCTUOUS AND THEY ARE A LSO DISMISSED. 16. IN THE RESULT, THE APPEALS FILED BY THE DEPARTMEN T AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE BOTH ARE DISMISSED. 8. THE ORDER PRONOUNCED IN THE OPEN COURT ON 02.05. 2011. SD/- SD/- [B.C. MEENA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 02.05.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NOS.3705 TO 3707/DEL/2010 CO NOS.281 TO 283/DEL/2010 7 DATE OF DICTATION 02.05.2011 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 03.05.2011 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH