The Income tax Officer, Bathinda V. Smt. Kanta Rani Garg, Bathinda

CO 50/ASR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9185 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 2 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-02-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAT INDER KAUR LD
• Assessee Lawyers: P N ARORA LD
• Keywords: Earning of tax free income; Assessment record; Capital receipt; TDS; Set aside
• Section: 14A; 147; 148; 28

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL AMRITSAR BENCH, AMRITS AR BEFORE SH. N.S.SAINI, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.312(ASR)/2013 ASSESSMENT YEAR:2009- 10 INCOME TAX OFFICER, WARD-II(I), BATHINDA. VS. SMT. KANTA RANI GARG, C/O M/S GARG SANITARY HOUSE, # 4505, BANK BAZAR, BATHINDA [PAN:AHROG 4574H] (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.50(ASR)/2013 (ARISING OUT OF ITA NO.312(ASR)/2013) ASSESSMENT YEAR:2009-1 0 SMT. KANTA RANI GARG, C/O M/S GARG SANITARY HOUSE # 4505, BANK BAZAR, BATHINDA [PAN:AHROG 4574H] VS. INCOME TAX OFFICER, WARD-II(I), BATHINDA. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SMT. RATINDER KAUR (LD. DR) RESPONDENT BY: SH. P.N. A RORA (LD. ADV.) DATE OF HEARING: 19.02.2019 DATE OF PRONOUNCEMENT: 27.03.2019 ORDER PER N.K.CHOUDHRY, JM: THE REVENUE DEPARTMENT HAS PREFERRED THE APPEAL I. E. ITA NO.312(ASR)/2013 AGAINST THE ORDER DATED 27.02.2013 IMPUGNED HEREIN PASSED BY THE LD. CIT(A), BATINDA U/S 250(6) OF THE I .T. ACT, 1961 ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 2 (HEREINAFTER CALLED AS THE ACT) WHEREBY THE LD. CIT( A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE . THE ASSESSE ALSO PREFERRED THE AFOR E-CAPTIONED CROSS OBJECTION AGAINST THE IMPUGNED ORDER. 2. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING GROUN DS OF APPEAL. 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.92,74,522/- MADE BY THE AO ON ACCOUNT OF INTEREST ON COMPENSATION/EN HANCED COMPENSATION DIRECTING THE SAME TO BE ASSESSED ON A CCRUAL BASIS; AS AGAINST ASSESSED BY THE AO ON RECEIPT BASIS. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, TH E LD. CIT(APPEALS) HAS ERRED IN DIRECTING TO ALLOW DEDUCT ION @ 40% OF THE INTEREST INCOME IN EACH YEAR IN RESPECT OF THE COST OF LITIG ATION FOR PURSUING THE CASE BY THE ASSESSEE IN VARIOUS COURTS IGNORING THE FACT THAT THE EXPENDITURE INCURRED, IF ANY, ON LITIGATION HAVE MAINLY BEEN IN CURRED FOR GETTING COMPENSATION/ENHANCED COMPENSATION, WHICH ARE EXEMP T FROM TAX, HENCE DEDUCTION ON ACCOUNT OF RELEVANT EXPENSES TO THIS I NCOME IS NOT ALLOWABLE U/S 14A OF THE ACT. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN CROSS OBJECTION NO. 50(ASR)/2013. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED AO HAS WRONGLY TAKEN THE INTEREST ON COMPENSATION AS PER G ROUND OF APPEAL NO. 1 AT RS.92,74,522/- WITHOUT ANY BASIS AGAINST RS.65 ,08,864/- TAKEN BY THE LEARNED CIT(A) AS PER DETAILED DISCUSSION IN HI S APPELLATE ORDER ON THE BASIS OF VARIOUS CERTIFICATES ISSUED BY THE COM PETENT AUTHORITIES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN ALLOWING EXPENSES @ 40% OF THE INTEREST CO MPONENT OUT OF TOTAL EXPENDITURE INCURRED MORE THAN RS.36,59,749/-. AS S UCH, THE BALANCE EXPENDITURE BE ALLOWED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION ON ACCOUNT OF DEPOSIT OF RS.5 LACS IN THE BANK ACCOUNT WHEREAS THE DEPOSIT IS OUT OF THE HEAV Y WITHDRAWALS MADE FROM THE BANK AS ALREADY EXPLAINED. ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 3 4. AS PER ASSESSMENT ORDER, THE BRIEF FACTS OF THE CASE ARE TH AT IN THE INSTANT CASE THE ASSESSMENT PROCEEDINGS U/S 147 HAVE BEEN IN ITIATED ON THE INTIMATION DATED 11.06.2010 OF THE DDIT (INV.) , LUDHIANA TO THE EFFECT THAT THE ASSESSEE HAS RECEIVED THE COMPENSATION FINA LLY IN THE F.Y.2008-09 (A.Y.2009-10) AT RS.72,30,731/- WHICH INC LUDED INTEREST OF RS.64,45,000/-. ACCORDINGLY, IT WAS HELD THAT CASE OF T HE ASSESSEE HAS ACHIEVED FINALITY IN F.Y.2008-09 RELEVANT TO THE A.Y .2009-10. ACCORDINGLY THE PAYMENT OF INTEREST OF RS.60,14,072/- RECEIVED BY THE ASSESSEE ALONG WITH SH. PREM KUMAR (JOINT OWNER) IN THE F.Y. 2004- 05 PLUS RS. 64,45,000/- RECEIVED IN THE YEAR UNDER CONSIDERATION, CONSIDERED TO BE FINALIZED IN THE F.Y. 2004-05 IN WHICH THE ASSESSEE HAS 5 0% SHARE. THE STATUTORY NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE . IN THE MEANTIME THE ASSESSEE FILED HER RETURN OF INCOME ON 09. 12.2010 DECLARING INCOME AT RS.21,220/- AND IN RESPONSE TO THE N OTICE U/S 148, THE ASSESSEE VIDE REPLY STATED THAT RETURN HAS ALREADY BE EN FILED ON 09.12.2010 WITH THE APPENDED NOTE. DURING THE RECEIVED ENHANCED COMPENSATION OF RS.72 ,20,731/- WHICH INCLUDES INTEREST OF RS.64,45,000/- ON WHICH TDS OF RS.5,11,484/- HAS BEEN DEDUCTED. THE INTEREST COMPONENT HAS NOT B EEN INCLUDED IN THE RETURN INCOME AS THE SAME IS TAXABLE ON THE FINALIT Y OF THE CASE OF ENHANCED COMPENSATION AS PER APPELLATE ORDER OF CIT (A) AND ITAT IN MY CASE. FOLLOWING THE JUDGMENT OF PUNJAB & HARYANA HI GH COURT IN THE CASE OF CIT VS. KARANVIR SINGH [2009] 217 CTR 585, RAMA BAI VS. 181 ITR 400 (SC) AND CIT VS. HARDWARI LAL, HUF & ORS. R EPORTED IN 219 CTR 583. THE BALANCE AMOUNT IS NOT TAXABLE BEING COMPE NSATION IN LIEU OF AGRICULTURAL LAND ACQUIRED OUT OF MUNICIPAL LIMIT A S EXPLAINED IN THE ASST. YEAR:2005-06. THEREAFTER, VARIOUS STATUTORY NOTICES U/S 143(2) & 142(1 ) ALONG WITH QUESTIONNAIRE WERE ALSO ISSUED TO THE ASSESSEE WHICH WE RE REPLIED BY THE ASSESSEE BY DISCLOSING AMOUNT OF COMPENSATION RECEIVED BY HER TO THE TUNE OF RS.31,34,753/- AND INTEREST THEREON AT RS. 85,92,289/-. IN THE ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 4 INTEREST AMOUNT OF RS.85,92,289/-, THE ASSESSEE HAS CLAIMED THAT SHE HAS CLAIMED 3/4 TH SHARE IN THIS AMOUNT WHICH WORKS OUT TO RS.78,00,731/- HOWEVER AS PER ASSESSMENT ORDER, NO EVIDENCE HAS BEEN FIL ED BY THE ASSESSEE IN SUPPORT OF CLAIM OF INTEREST RECEIVED BY HER STA TED TO BE RECEIVED FROM HER BROTHER SH. PREM KUMAR THROUGH CHEQ UE OF RS.5,80,000/-. THE ASSESSEE HAS ALSO FAILED TO FILE ANY EVIDENCE TO PROVE THAT SHE HAS ACTUALLY RECEIVED TOTAL INTEREST OF RS.78,00,731/- A ND NOT INTEREST OF RS.94,52,036/- AS PER REASONS RECORDED BY THE ERSTWHILE A SSESSING OFFICER ON 8.12.2010. THE ASSESSEE WAS ALSO ASKED TO FURNISH DETAIL S OF BANK ACCOUNT AGAINST WHICH THE ASSESSEE FILED THE COPY OF BANK A CCOUNT FOR ONE YEAR ONLY AND FROM WHERE IT WAS SEEN THAT THERE WAS CR EDIT ENTRY OF RS.5 LACS ON ACCOUNT OF CASH DEPOSIT. ON QUERY, THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE SAME. ACCORDINGLY, THE AFORESAID AMOUN T OF RS.5 LACS WAS ALSO ADDED IN THE INCOME DECLARED/ASSESSED ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN BANK ACCOUNT OF THE ASSESSEE. F URTHER THE ASSESSING OFFICER ALSO ADDED RS.30,07,036/- ON ACCOUNT OF IN TEREST BY VIRTUE OF CASE NO. 84/90, RECEIVED BY THE ASSEEEE ALONG WITH CO-OWNER SH. PREM KUMAR AND THE AMOUNT OF RS.64,45,000/- ON A CCOUNT OF INTEREST RECEIVED BY THE ASSESSEE UPTO THE FINALITY OF THE CASE AS PER INFORMATION RECEIVED FROM DDITS LETTER DATED 11.06.2010 RECEIVED BY THE ASSESSING OFFICER ON 10.12.2010. 5. THE ASSESSEE BEING AGGRIEVED BY ASSESSMENT ORDER, PREFER RED THE FIRST APPEAL BEFORE THE LD. CIT(A), WHO WHILE CONSIDER ING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE AND JUDGMENTS RELIED U PON BY THE PARTIES, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY H OLDING AS UNDER: ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 5 I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMST ANCES OF THE CASE, WRITTEN SUBMISSIONS OF THE AR OF THE ASSESSEE APPELLANT BEF ORE THE ASSESSING OFFICER AS WELL AS BEFORE ME, THE ASSESSMENT ORDER PASSED B Y THE ASSESSING OFFICER AND PERUSAL OF ASSESSMENT RECORD. THE APPEAL IS DEC IDED AS UNDER:- GROUND OF APPEAL NO.1 IS OF GENERAL NATURE, HENCE D ISMISSED. GROUND OF APPEAL NO.2 RELATES TO THE AMOUNT OF INTE REST RECEIVED BY THE ASSESSEE APPELLANT ON ENHANCED COMPENSATION. ACCORD ING TO THE ASSESSEE APPELLANT SHE RECEIVED A SUM OF RS.64,45,000/- AND WHEREAS ACCORDING TO THE AO THE AMOUNT RECEIVED IS RS.9452036/- WORKED OUT A S UNDER: INTEREST RECEIVED BY THE ASSESSEE IN THE CASE NO.84 /90 RECEIVED BY HER ALONG WITH A CO-OWNER SH. PREM KUMA R 6014072 (A) 50% FAILING TO ASSESSEE SHARE 3007036 (B) INTEREST RECEIVED BY THE ASSESSEE UPTO FINALITY OF THE CASE. AS PER INFORMATION RECEIVED FROM DDITS LETTE R DATED 11-06-2010 RECEIVED IN THIS OFFICE ON 10-1 2-2010 6445000 ------- ---- 9452036 ------------ 12% ADD 9% INT. INTEREST 15% TOTAL 50% OF DECREE COMPENSATION ON COL 8 14.07.87 TO 20.01.1988 191 DAYS ON COL 8 FOR ONE YEAR 21- 01-88 TO 20- 01-89 ON COL 8 W.E.F. 21- 01- 89 TO 29-11- 04 5768 DAYS DECREE 10 11 12 13 14 149671.02 214515.41 5649885.27 9112627.76 4556313.80 SR. NO R.A.NO. APPEAL NO. NAME AREA IN COMPENSATION SOLACIAM SQ.YDS. AWARDED BY COURT @ RS. 65/- PER SQ.YDS LESS PAID BY SR. LAO ENHANCED @ 30% ON COL NO. 6 1 2 3 4 5 6 7 8 9 1 84/90 1035/04 SMT KANTA OTHER 39703.1 2 2580702.80 197198.26 2383704.7 715051 .36 DURING THE APPELLATE PROCEEDINGS THE A/R OF TH E ASSESSEE APPELLANT FILED A CHART AS PREPARED UPTO 25-11-2004 FILED DURING THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2005-06 RE-PRODUCED HERE AS UND ER:- AS PER THIS CHART THE TOTAL INTEREST UPTO 25-1 1-2004 IS WORKED AS PER COLUMN 10,11 & 12 AMOUNTING TO RS.6014071.70 (149671.02+214515.41+5649885.27). SIMILARLY AS PER THIS CHART THE COMPENSATION WORKS OUT TO RS.3098556/- AS PER COLUMN 6,7,8 & 9. OUT OF THIS 50% AMOUNT HAS BEEN P AID DURING THE ASSESSMENT ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 6 YEAR 2005-06 AS EXPLAINED AT THE TIME OF ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06. IN THE ASSESSMENT YEAR 2005-06 BY TAKING 5 0% OF THIS AMOUNT OF INTEREST I.E. RS. 3007036/-. THE BALANCE AMOUNT RET AINED BY THE DEPARTMENT WAS RELEASED IN THE ASSESSMENT YEAR 2009-10 AS PER CHAR T PREPARED BY CALCULATING THE INTEREST TILL 29-02-2008 INSTEAD OF UPTO 25-11-2004 . COPY OF CHART IS ENCLOSED HEREWITH. AS PER CHART THE INTEREST HAS BEEN CALCULATED AS P ER COLUMN 11,13, 14 AND 18 AMOUNTING TO RS.8678486/- (86197+286627+7580586+ 725076/-). AS PER THE CHART IT HAS CLEARLY BEEN MENTIONED IN COLUMN 16 TH AT A SUM OF RS.4556313/- HAS BEEN PAID BY THE UPSIDC ON 25-11-2004. THEREFORE, T HE AO IS NOT CORRECT BY TAKING THE FIGURES OF INTEREST PAID EARLIER AGAIN I N CALCULATING THE GROSS INTEREST AT THE TIME OF MAKING ASSESSMENT. THE EARLIER FIGURES OF INTEREST HAS BEEN INCLUDED IN THE INTEREST FIGURES OF RS.8678486/-. AS PER REG ISTERED DEED THE ASSESSEE APPELLANT IS HAVING 3/4 TH SHARE IN THE LAND, THEREFORE, THE INTEREST WHICH H AS TO BE CONSIDERED FOR ASSESSMENT IS RS. 6508864/- INSTEAD OF RS.6445000/- AS CLAIMED BY THE ASSESSEE APPELLANT OR RS.9452036/- AS CALCUL ATED BY THE AO. THEREFORE, THE AO IS DIRECTED TO TAKE THE INTEREST AT RS.65088 64/- INSTEAD OF RS.9452036/-. ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWED PARTLY . GROUND NO. 3 IS ON ACCOUNT OF ASSESS-ABILIT Y OF INTEREST RECEIVED ON ENHANCED COMPENSATION FROM 23-09-1987 TILL RECEIVED BY THE A SSESSEE APPELLANT. THE ASSESSEE APPELLANT HAS CLAIMED BEFORE THE ASSESSING OFFICER THAT THIS INTEREST IS PART OF COMPENSATION, THEREFORE, IS CAPITAL RECEIPT AS HELD BY THE ASSESSING OFFICER IN THE CASE OF OTHER CO-OWNER SHRI PREM KUMAR IN VI EW OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GHANSHYAM HUF 315 ITR 1 (SC). I HAD GONE THROUGH THE JUDGMENT OF HONBLE SUPREME COURT AND FOUND THAT HONBLE COURT HAS BIFURCATED THE INTERES T INTO TWO PARTS ONE IS INTEREST PAYABLE UNDER SECTION 28 OF THE LAND ACQUISITION AC T I.E. PAYABLE FROM THE DATE OF NOTIFICATION TO THE DATE OF POSSESSION AND ACCORDIN G TO THE HONBLE COURT THIS AMOUNT IS PART OF THE COMPENSATION. THE OTHER INTER EST PAYABLE UNDER SECTION 34 OF THE LAND ACQUISITION ACT 1984 IS ON ACCOUNT OF D ELAYED PAYMENT OF COMPENSATION AND THIS INTEREST IS TAXABLE UNDER THE ACT. THE ASSESSEE APPELLANT HAS NOT GIVEN ANY SUCH BIFURCATION, THEREFORE, THER E IS NO FORCE IN THE ARGUMENT OF THE A/R OF THE ASSESSEE APPELLANT THAT INTEREST REC EIVED IS NOT TAXABLE. HENCE, THIS GROUND OF APPEAL OF THE ASSESSEE APPELLANT IS REJEC TED. GROUND OF APPEAL NO. 4 IS ON ACCOUNT OF CHARGEABIL ITY OF THE FULL AMOUNT OF INTEREST IN THE ASSESSMENT YEAR 2009-10. ACCORDING TO THE A/R OF THE ASSESSEE APPELLANT THAT AS PER JUDGMENT OF THE HONBLE SUPRE ME COURT IN THE CASE OF RAMA BAI VS. CIT 181 ITR 400 AND THE HONBLE ITAT, AMRIT SAR BENCH IN THE ASSESSEE APPELLANT OWNS CASE INTEREST IS NOT CHARGEABLE IN T HE YEAR OF RECEIPT BUT CHARGEABLE FROM YEAR TO YEAR BASIS. I HAD GONE THRO UGH THE JUDGMENT OF HON,BLE SUPREME COURT AND THE FINDING OF THE HONBLE ITAT, AMRITSAR BENCH IN THE ASSESSEE OWN CASE AND ALSO EXAMINED THE AMENDMENT M ADE BY THE HONBLE PARLIAMENT W.E.F. 01-04-2010. AFTER EXAMINATION THA T AS PER SETTLED LAW TILL 31-03- 2009 THERE IS NO DISPUTE THAT THE INTEREST ON ENHAN CED COMPENSATION IS CHARGEABLE ON ACCRUAL BASIS. AS SUCH, THE AO IS NOT JUSTIFIED IN MAKING THE ASSESSMENT OF THE FULL AMOUNT OF INTEREST IN THE AS SESSMENT YEAR 2009-10. THEREFORE, I DIRECT THE AO TO BIFURCATE THE SAME IN TO 22 YEARS I.E. FROM THE ASSESSMENT YEAR 1988-89 TO 2009-10 I.E. RS.295857/- IN EACH YEAR. ACCORDINGLY ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 7 ADDITION CONFIRMED IN THIS YEAR ON ACCOUNT OF CHARG EABILITY OF INTEREST AMOUNTING TO RS.295857/- AGAINST RS.9452036/-. THE BALANCE AD DITION MADE IS DELETED TO BE MADE IN THE RESPECTIVE YEARS AS PER LAW. GROUND OF APPEAL NO. 5 IS ON ACCOUNT OF ALLOW-ABIL ITY OF EXPENSES INCURRED FOR RECEIVING THE COMPENSATION BEFORE THE LOWER AUT HORITIES AND VARIOUS COURTS OUT OF THE INTEREST RECEIVED BY THE ASSESSEE APPELLANT. DURING THE ASSESSMENT PROCEEDINGS AS WELL AS BEFORE ME, THE ASSESSEE APPE LLANT HAS CLAIMED THAT HE INCURRED EXPENDITURE OF RS. 2799333/- AS PER DETAIL S ALREADY ON FILE. MOREOVER, FROM THE ASSESSMENT YEAR 2010-11 IN SUCH TYPE OF CA SES THE PARLIAMENT HAS ALLOWED ADHOC EXPENDITURE OF 50% BY AMENDING THE LA W AND THE FINDING OF THE LEARNED CIT(A) IN THE ASSESSEE APPELLANT OWN CASE A T THE TIME OF DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2005-06 THE EXPENDIT URE CLAIMED BE ALLOWED. THE FINDINGS OF MY PREDECESSOR DURING THE APPELLATE PRO CEEDINGS ARE REPRODUCED HERE AS UNDER:- THIS GROUND IS REGARDING THE ALLOWABILITY OF EXPEN SES INCURRED IN RESPECT OF ENHANCED COMPENSATION. AS I HAVE ALREADY HELD ABOVE THAT THE ENHANCED COMPENSATION IS NOT TAXABLE IN TH E YEAR 2005- 06, THEREFORE, THE EXPENSES ARE ALSO NOT ALLOWABLE IN THIS YEAR. THE SAME ARE ALLOWABLE ONLY IN THE YEAR WHEN THIS I NTEREST AMOUNT IS TAXABLE. AFTER CONSIDERING THE TOTALITY OF THE FACTS, AMENDM ENT MADE IN THE ACT FROM THE ASSESSMENT YEAR 2010-11 AND FINDING OF THE LEARNED CIT(A) AT THE TIME OF DECIDING APPEAL FOR THE ASSESSMENT YEAR 200 5-06, I FEEL THAT THE CLAIM OF THE ASSESSEE IS GENUINE. THEREFORE, TO BE REASON ABLE AND TO MEET THE END OF JUSTICE, I DIRECT THE AO TO ALLOW 40% OF THE INTERE ST COMPONENT AS EXPENDITURE AT THE TIME OF COMPUTING INCOME FOR EACH YEAR. GROUND OF APPEAL NO.6 IS ON ACCOUNT OF DEPOSIT OF RS.5 LACS IN BANK ACCOUNT. DURING THE APPELLATE PROCEEDINGS THE A/R O F THE ASSESSEE APPELLANT ARGUED THAT AS PER BANK ACCOUNT THE ASSESSEE APPELL ANT HAS MADE HEAVY WITHDRAWALS, THEREFORE, SHE IS HAVING SUFFICIENT FU NDS TO MAKE THE DEPOSIT IN THE BANK BUT AFTER CAREFUL EXAMINATION OF THE MATER IAL ON RECORD THAT ASSESSEE APPELLANT HAS CLAIMED ALL THESE WITHDRAWALS IN CONN ECTION WITH THE EXPENDITURE, THEREFORE, THERE IS NO FORCE IN THE AR GUMENT OF THE A/R OF THE ASSESSEE APPELLANT, HENCE, ADDITION MADE BY THE AO IS IN ORDER. THE SAME IS CONFIRMED. 6. THE REVENUE DEPARTMENT DISSATISFIED, PREFERRED THE IN STANT APPEAL ON THE GROUNDS THAT THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.92,74,522/- MADE BY THE AO ON ACCOUNT O F INTEREST ON COMPENSATION/ENHANCED COMPENSATION DIRECTING THE SAME TO B E ASSESSED ON ACCRUAL BASIS, AS AGAINST ASSESSED BY THE AO ON RECEIPT B ASIS AND ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 8 FURTHER THE LD. CIT(APPEALS) HAS ERRED IN DIRECTING T O ALLOW DEDUCTION @ 40% OF THE INTEREST INCOME IN EACH YEAR IN RESPECT OF TH E COST OF LITIGATION FOR PURSUING THE CASE BY THE ASSESSEE IN VARIOUS COURTS IGNO RING THE FACT THAT THE EXPENDITURES INCURRED, IF ANY, ON LITIGATION HAVE MAINLY BEEN INCURRED FOR GETTING COMPENSATION/ENHANCED COMPENSATION, WHICH ARE EXEMPT FROM TAX, HENCE DEDUCTION ON ACCOUNT OF RELEVANT EXPENSES TO THIS INCOME IS NOT ALLOWABLE U/S 14A OF THE ACT. 7. LET US TO EXAMINE THE GROUND NO.1 RAISED BY THE REVENUE. THE ASSESSING OFFICER WORKED OUT THE INTEREST OF RS.94,52,036/ - WHICH INCLUDES THE AMOUNT OF RS.30,07,036/- BEING 50% OF THE TOTAL INTEREST OF RS.60,14,072/- RECEIVED BY THE ASSESSEE IN CASE NO.84/90 AL ONG WITH HER BROTHER CO-OWNER SH. PREM KUMAR AND THE AMOUNT OF RS. 64,45,000/- INTEREST RECEIVED BY THE ASSESSEE UP TO FINALITY OF THE CA SE AS PER INFORMATION RECEIVED FROM DDITS LETTER DATED 11.06.2 010 RECEIVED IN THE OFFICE OF THE ASSESSING OFFICER ON 10.12.2010. THE ASSESSEE HAD FILED A CHART DETAILING THE RECEIPT OF THE AMOUNT OF COMPENSATI ON AND INTEREST WHEREBY IT WAS CLAIMED THAT THE 50% OF THE AMOUNT OF RS.30,98,556/- HAS BEEN RECEIVED DURING THE ASSESSMENT YEAR 2005-06 AS E XPLAINED AT THE TIME OF ASSESSMENT FOR THE A.Y.2005-06. IN THE A.Y .2005-06 BY TAKING 50% OF THIS AMOUNT OF INTEREST I.E. 30,07,036/ -, THE BALANCE AMOUNT RETAINED BY THE DEPARTMENT WAS RELEASED TO TH E ASSESSE DURING A.Y.2009-10. AS PER COLUMN 10, 11 & 12 OF THE CHART, THE TOTAL INTEREST UPTO 25-11-2004 IS WORKED TO RS.6014071.70 (149671.02 + 214515.41 + 5649885.27). SIMILARLY AS PER COLUMN 6, 7, 8 & 9 TH E CHART, THE COMPENSATION WORKS OUT TO RS.3098556/-. OUT OF THIS 50% AMOUNT HAS BEEN PAID DURING THE ASSESSMENT YEAR 2005-06 AS EXPLAINE D AT THE TIME OF ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06. IN THE ASSESSME NT YEAR ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 9 2005-06 BY TAKING 50% OF THIS AMOUNT OF INTEREST I.E. RS. 3007036/-. THE BALANCE AMOUNT RETAINED BY THE DEPARTMENT WAS RELEASED IN THE ASSESSMENT YEAR 2009-10 AS PER CHART PREPARED BY CALCULATI NG THE INTEREST TILL 29-02-2008 INSTEAD OF UPTO 25-11-2004. AS PER CHART THE INTEREST HAS BEEN CALCULATED AT RS.86,78,486/- (86197 + 286627 + 7580586/- + 725076/-) AND IT IS CLEARLY MENTIONED IN COLUMN NO.16 OF THE CHART THAT SUM OF RS.45,56,313/- HAS BEEN PAID BY T HE UPSIDC ON 25.11.2004, THEREFORE, IT WAS HELD BY THE LD. CIT(A) THAT THE AO IS NOT CORRECT BY TAKING THE FIGURES OF INTEREST PAID EARLIER AGAIN IN CALCULATING THE GROSS INTEREST AT THE TIME OF MAKING ASSESSMENT. THE E ARLIER FIGURE OF INTEREST HAS BEEN INCLUDED IN THE INTEREST FIGURES OF RS. 86,78,486/-. AS PER REGISTERED DEED THE ASSESSEE/ APPELLANT IS HAVING 3/4 TH SHARE IN THE LAND THEREFORE THE INTEREST WHICH HAS TO BE CONSIDERED F OR ASSESSMENT IS RS.65,08,864/- INSTEAD OF RS.64,45,000/- AS CLAIMED BY T HE ASSESSEE/APPELLANT AND AGAINST THE AMOUNT OF RS.94,52,036 /- AS CALCULATED BY THE AO THEREFORE ON THE AFORESAID REASONS THE LD. CIT(A) DIRECTED THE AO TO TAKE THE INTEREST OF RS.65,08,864/ - INSTEAD OF RS.94,52,036/-. 7.1 THE LD. CIT(A) WHILE FOLLOWING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF RAMA BAI VS. CIT, 181 ITR 400 AND THE HONBLE ITAT, AMRITSAR BENCH IN THE ASSESSEES OWN CASE HELD THAT AS PER SE TTLED LAW TILL 31 ST MARCH, 2009 THERE IS NO DISPUTE THAT THE INTEREST ON E NHANCED COMPENSATION IS CHARGEABLE ON ACCRUAL BASIS. AS SUCH, THE AO I S NOT JUSTIFIED IN MAKING THE ASSESSMENT OF THE FULL AMOUNT OF INTEREST IN THE ASSESSMENT YEAR 2009-10. THEREFORE THE LD. CIT(A) DIRECT ED THE AO TO BIFURCATE THE SAME IN 22 YEARS I.E., FROM THE A.Y.1988 -89 TO 2009-10 I.E., RS.2,95,857/- IN EACH YEAR AND ACCORDINGLY ADDITION OF RS.2,95,857/- FOR ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 10 THE RELEVANT YEAR AND THE BALANCE ADDITION WAS DIRECTE D TO BE MADE IN THE RESPECTIVE YEARS AS PER LAW. 7.2 CHALLENGING THE SAID ACTION OF THE CIT(A) , THE REVE NUE DEPARTMENT RELIED UPON THE LATEST JUDGMENT PASSED BY THE APEX CO URT IN THE CASE OF COMMISSIONER OF INCOME TAX, FARIDABAD VS. CHETRAM (HUF) CIVIL APPEAL NO.53/2017 DECIDED ON DATED 12.09.2017 WHEREIN THE HO NBLE APEX COURT HAS HELD THAT THE RESPONDENTS ARE LIABLE TO PAY TAX ON THE ENHANCED AMOUNT OF COMPENSATION AND INTEREST RECEIV ED BY THEM DURING THE YEAR IN QUESTION . WE HAVE CONSIDERED THE SUBMISSION OF THE REVENUE AND ARE OF THE VIEW THAT AS PER APEX COURT L ATEST DICTUM ENHANCED AMOUNT OF COMPENSATION AND INTEREST CAN BE SUBJ ECTED TO TAX DURING THE YEAR IN QUESTION ONLY, THEREFORE FOR SUBSTA NTIAL JUSTICE WE FEEL IT APPROPRIATE TO SET ASIDE THE ISSUE UNDER CONSIDERATIO N TO THE FILE OF THE LD. CIT(A) TO DECIDE AFRESH IN VIEW OF THE LATEST JUDG MENT PASSED BY THE HONBLE APEX COURT REFERED ABOVE . 7.3 SECOND GROUND RAISED BY THE REVENUE DEPARTMENT RELA TES TO THE DEDUCTION OF ALLOWANCE @ 40% OF THE INTEREST INCOME IN EACH YEAR QUA COST OF LITIGATION FOR PURSUING THE CASE BY THE ASSESSEE IN VARIOUS COURTS. THE REVENUE HAS RAISED THE CONTENTION THAT THE SAID EX PENDITURES INCURRED, IF ANY, ON LITIGATION HAVE MAINLY BEEN INCU RRED FOR GETTING COMPENSATION/ENHANCED COMPENSATION, WHICH IS EXEMPT FROM T AX, HENCE, DEDUCTION ON ACCOUNT OF RELEVANT EXPENSES TO THIS INCOME I S NOT ALLOWABLE U/S 14A OF THE ACT. BEFORE THE ASSESSING OFFICER, THE ASSESSE HAD MADE A CLAIM O F DEDUCTION EQUAL TO 50% OF THE TOTAL AMOUNT OF INTERE ST RECEIVED BY HER RELYING UPON THE PROVISIONS OF SEC.57(IV) OF THE ACT, I N LIEU OF FEES PAID TO ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 11 THE ADVOCATES AND OTHER CONNECTED PERSONS FOR PURSUING ITS VARIOUS COURT CASES. THE ASSESSING OFFICER DISALLOWED THE SAID DEDUCTION WHI LE REFERRING THE PROVISION OF SEC.57(IV) WITH REMARKS THAT THE SAID PROVISION WAS INTRODUCED BY THE FINANCE ACT, 2009 AND MADE APPLICABL E W.E.F., 1 ST APRIL, 2010 THEREFORE, SHALL NOT BE APPLICABLE TO THE ASSESSMEN T YEAR 2009-10 FOR WHICH THE ASSESSMENT IS FRAMED. THE ASSESSING OFFICER ALSO OBSERVED THAT AS PER PROVISION OF SEC.14 OF THE ACT, ANY EXPENDIT URE INCURRED FOR EARNING EXEMPT INCOME IS NOT ALLOWABLE FROM THE TAXA BLE INCOME. IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER THAT NO EVIDEN CE HAS BEEN GIVEN THAT THE EXPENDITURE RELATED TO THE CLAIM OF I NTEREST RECEIVED BY HER ON THE COMPENSATION/ENHANCED COMPENSATION. THE LD. CIT(A ) WHILE CONSIDERING THE DETAILS OF EXPENDITURE TO THE TUNE OF RS.27,99,333/- ALREADY ON RECORD IN FILE AND ALSO CONSIDERING THE AMEN DMENT MADE BY THE PARLIAMENT IN THE PROVISION OF SEC.57(IV) OF THE ACT WHICH IS APPLICABLE FROM THE ASSESSMENT YEAR 2010-11 AS WELL AS CONSI DERING THE FINDING OF THE ERSTWHILE LD. CIT(A) FOR THE ASSESSEES OW N CASE IN ASSESSMENT YEAR:2005-06, HOLD THAT THE CLAIM OF THE ASSESSE E AS GENUINE AND ALLOWED 40% OF THE INTEREST COMPONENT AS E XPENDITURE AT THE TIME OF THE COMPUTING INCOME FOR EACH YEAR. THE LD. DR SPECIFICALLY RAISED THE OBJECTION THAT THE DECISION ON THE INSTANT ISSUE OF THE LD. CIT (A) IS CONTRARY TO THE LAW AND BASED ON NO EVIDENCE AND REASONS. ON THE CONTRARY, THE LD. AR SUBMIT TED THAT THE LD. CIT(A) HAS MADE A CORRECT DECISION IN VIEW OF THE AMENDM ENT MADE IN THE PROVISION TO SEC.57(IV) OF THE ACT. 7.4 WE HAVE PERUSED THE RELEVANT AMENDMENT MADE IN THE PROVISIONS OF SEC.57 (IV) WHEREBY SUB-CLAUSE (IV) WAS INTRODUCED W.E .F. 1 ST APRIL, 2010 BY FINANCE (2) ACT, 2009 WHICH WOULD BE MADE APP LICABLE FROM ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 12 ASSESSMENT YEAR 2010-11. AS WE HAVE ALREADY REMANDED THE ISSUE QUA QUANTIFICATION AND TREATMENT OF THE INTEREST AS PER L ATEST JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, FARIDABAD VS. CHETRAM (HUF) (SUPRA), HENCE FOR SUBSTANTI AL JUSTICE, APPROPRIATE COURSE WOULD BE TO SET ASIDE THE ISSUE UNDER CONSIDERATION TO THE FILE OF THE LD. CIT(A) TO DECIDE AFRESH IN VIEW O F THE DECISION IN CIT VS. CHET RAM (HUF) (SUPRA) AND ALSO AMENDED PROVISION IN SECTION 57(IV) INTRODUCED BY FINANCE ACT (2), 2009 APPLICABLE W.E.F. 1 ST APRIL, 2010 AND ALSO IN VIEW OF SECTION 14A OF THE ACT. ORDERED ACCORDIN GLY. 8. NOW COMING TO THE CROSS OBJECTIONS FILED BY THE ASSESSEE. THE FOLLOWING GROUNDS RAISED BY THE ASSESSEE BY WAY OF C ROSS OBJECTIONS . 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED AO HAS WRONGLY TAKEN THE INTEREST ON COMPENSATION AS PER G ROUND OF APPEAL NO. 1 AT RS.92,74,522/- WITHOUT ANY BASIS AGAINST RS.65 ,08,864/- TAKEN BY THE LEARNED CIT(A) AS PER DETAILED DISCUSSION IN HI S APPELLATE ORDER ON THE BASIS OF VARIOUS CERTIFICATES ISSUED BY THE COM PETENT AUTHORITIES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN ALLOWING EXPENSES @ 40% OF THE INTEREST CO MPONENT OUT OF TOTAL EXPENDITURE INCURRED MORE THAN RS.36,59,749/-. AS S UCH, THE BALANCE EXPENDITURE BE ALLOWED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION ON ACCOUNT OF DEPOSIT OF RS.5 LACS IN THE BANK ACCOUNT WHEREAS THE DEPOSIT IS OUT OF THE HEAV Y WITHDRAWALS MADE FROM THE BANK AS ALREADY EXPLAINED. 8.1 THE FIRST GROUND OF C.O RELATES TO THE ACTION OF THE LD. AO WHICH SUBSEQUENTLY MERGED WITH THE DECISION OF THE LD. CIT(A) HENCE, DOES NOT REQUIRE ANY ADJUDICATION. 8.2 GROUND NO.2, THE ASSESSEE CHALLENGED THE ACTION OF TH E LD. CIT(A) BY CLAIMING THAT THE LD. CIT(A) HAS EARED IN ALLOWING EXPENSES @ 40% OF ITA NO.312/ASR/2013 (A.Y.2009-10) C .O. NO.50 (ASR)/2013 ITO VS. SMT. KA NTA RANI GARG, BHATINDA 13 THE INTEREST COMPONENT OUT OF THE TOTAL EXPENDITURE I NCURRED MORE THAN 36,59,749/-. AS WE HAVE ALREADY SET ASIDE THE ISSUE UNDE R CONSIDERATION AS RAISED VIDE GROUND 2 IN APPEAL BY REVENUE, TO THE FILE OF THE LD. CIT(A) THEREFORE THIS GROUND DOES NOT SURVIVE . 8.3 GROUND NO.3, THE ASSESSEE CHALLENGED THE ACTION OF TH E LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.5 LACS ON ACCOUNT OF DE POSIT IN BANK BY SUBMITTING THAT THE DEPOSIT WAS OUT OF SELF WITHDRAWAL MADE FROM THE BANK AS ALREADY EXPLAINED TO THE REVENUE DEPARTMENT. AT THE TIME OF HEARING OF THIS APPEAL THE ASSESSEE HAS FAILED TO SUBSTANTI ATE ITS CLAIM, HENCE IN OUR CONSIDERED VIEW THE SAME IS LIABLE TO BE DI SMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE DEPAR TMENT STANDS REMANDED TO THE FILE OF THE LD. CIT(A) FOR DECISION A FRESH AND WHEREAS THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.03.2019. SD/- SD/- (N.S.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED: 27.03.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SMT. KANTA RANI GARG, C/O M/S GARG SANITARY HOUSE # 4 505, BANK BAZAR, BATHINDA. (2) THE INCOME TAX OFFICER, WARD-II(I), BHATIN DA. (3) THE CIT(A), BHATINDA (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER