Smt. Gira Sarabhai, Ahmedabad V. The Dy.CIT.,Circle-2, Ahmedabad

ITA 1023/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94832 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAMLSH MAKWANA

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.168/AHD/2011 [ASSTT/YEAR 2006-2007] AND ITA NO.1023/AHD/2011 / ASSTT. YEAR: 2008-2009 SMT. GIRA SARABHAI THE RETREAT NR. UNDERBRIDGE SHAHIBAUG, AHMEDABAD. PAN : AMIPS 5024 Q VS DCIT, CIR.2 AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.M. MEHTA WITH SHRI GULAB THAKOR REVENUE BY : SHRI KAMLSH MAKWANA, SR. ! / DATE OF HEARING : 07/12/2015 '#$ ! / DATE OF PRONOUNCEMENT: 08/12/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD.CIT(A), GANDHINAGAR DATED 2.11.2010 AND 1.3.2011 PASSED FOR THE ASSTT.YEARS 2 006-07 AND 2008- 09 RESPECTIVELY. ITA NO.168/AHD/2011 (2 APPEALS) 2 2. THE ISSUES INVOLVED IN BOTH THE APPEALS ARE COMM ON, THEREFORE, WE HEARD BOTH THE APPEALS TOGETHER AND DEEM IT APPR OPRIATE TO DISPOSE OF BY THIS COMMON ORDER. 3. THE GROUNDS OF THE APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPEL LATE TRIBUNAL) RULES, 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIV E IN NATURE. IN BRIEF HER GRIEVANCE REVOLVES AROUND TWO ISSUES IN T HE ASSTT.YEAR 2006- 07 VIZ. (A), THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,14,220/- WITH REGARD TO INTEREST FROM IDBI AND (B) DISALLOWING OF EXPENDITURE AMOUNTING TO RS.2,10,155/-. IN THE ASSTT.YEAR 2008-09, THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN UPHOLDING THE AS SESSMENT OF RS.2,55,795/- RECEIVED BY THE ASSESSEE BY WAY OF IN TEREST ON FIXED DEPOSITS WITH IDBI. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS FIL ED HER RETURN OF INCOME ON 29.7.2006 AND 31.7.2008 DECLARING TOTAL I NCOME AT RS.20,01,320/- AND RS.20,48,839/- IN THE ASSTT.YEAR S 2006-07 AND 2008-09 RESPECTIVELY. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICES UNDER SECTION 143(2 ) WERE ISSUED AND SERVED UPON THE ASSESSEE ON 24.9.2008 AND 3.9.2009 IN THE ASSTT.YEAR 2006-07 AND 2008-09 RESPECTIVELY. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS RECEIVED I NTEREST OF RS.1,14,220/- IN RESPECT OF HER INVESTMENT IN IDBI BANK IN THE ASSTT.YEAR 2006-07 AND RS.2,55,795/- IN THE ASSTT.Y EAR 2008-09. ACCORDING TO THE LD.AO, THE ASSESSEE FAILED TO SHOW THESE INTEREST INCOME IN HER RETURN, THEREFORE, THE SAME DESERVES TO BE ADDED IN HER TAXABLE INCOME. ACCORDINGLY, HE MADE ADDITION IN B OTH THE ASSESSMENT YEARS. ITA NO.168/AHD/2011 (2 APPEALS) 3 5. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 6. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT BEFORE THE AO, IT WAS CONTENDED THAT THE ASSESSEE IS AN EL DERLY LADY BORN IN THE YEAR 1923. SHE BELONGS TO ILLUSTRIOUS FAMILY O F SMT. MRUNALINI SARABHAI AND LATE DR. VIKRAM SARABHAI. SHE HAS RET URNED INCOME OF MORE THAN RS.20 LAKHS IN THESE ASSESSMENT YEARS. S HE HAD GROSS ASSETS IN THE BALANCE SHEET OF MORE THAN RS.532.4 L AKHS. SHE ALONG WITH MANA SARABHAI AND SHYAMA SARABHAI HOLDING 1043 15 SHARES OF SARABHAI HOLDINGS P. LTD. IN WHICH MANA SARABHAI AN D SHYAMA SARABHAI HAVE BENEFICIAL INTEREST. THE NAME OF THE ASSESSEE WAS FIRST MENTIONED IN THE SAID SHARES AND DIVIDEND AMOUNT ON THE SAID SHARES WERE RECEIVED BY HER FROM SARABHAI HOLDINGS PVT. LTD. SI NCE JUNE, 1999 AND TILL SEPTEMBER, 2011. THE AGGREGATE ACCUMULATED AM OUNT OF SAID DIVIDEND WAS RS.67,80,475/-. THIS AMOUNT HAS TO BE REIMBURSED BY THE ASSESSEE TO MANA SARABHAI AND SHYAMA SARABHAI IN PR OPORTION TO THEIR RESPECTIVE ENTITLEMENTS. THERE WAS A CIVIL LITIGAT ION BETWEEN DIFFERENT STAKE HOLDERS AND FOR THIS REASON, THE AMOUNT COULD NOT BE PAID TO THOSE PERSONS AND THE INTEREST INCOME WAS ACCRUED TO THE ASSESSEE. ACCORDING TO THE ASSESSEE, HER OWNERSHIP ON THESE F DRS. AND SHARES WAS IN FIDUCIARY CAPACITY AND SHE WAS NOT THE REAL OWNER OF THE ALLEGED INTEREST INCOME. THE LD.COUNSEL FOR THE ASSESSEE F URTHER CONTENDED THAT THE DEPARTMENT HAS INITIATED PENALTY PROCEEDINGS AG AINST THE ASSESSEE ON THESE ADDITIONS, THOUGH THE LD.CIT(A) HAS DELETE D THE PENALTY VIDE ORDER DATED 19.2.2014. HE PLACED ON RECORD COPIES OF THESE ORDERS. HE CONTENDED THAT THE ADDITION BE DELETED FROM THE HAN DS OF THE ASSESSEE. 7. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ER OF THE AO. 8. W HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE INTEREST INCOME WAS GENERATED ON THE FDRS, WHICH IS ASSESSABLE TO TAX. THE NAME OF THE ASSESSEE IS ALSO APPEARING IN THE F DRS./INVESTMENTS. ITA NO.168/AHD/2011 (2 APPEALS) 4 ACCORDING TO THE ASSESSEE SHE WAS HOLDING THIS INVE STMENT IN FIDUCIARY CAPACITY, BUT THE TAX ON THE INCOME RESULTED ON THE INVESTMENTS OUGHT TO BE OFFERED FOR TAXATION. WHEN WE CONFRONTED THE LD. COUNSEL FOR THE ASSESSEE TO TELL IN WHOSE HANDS THESE AMOUNTS SHOUL D BE TAXED, HE SUBMITTED THAT AS FAR AS THE TAXABILITY PART IS CON CERNED, THE ASSESSEE DOES NOT MIND IN PAYING THE TAX. DIFFICULTY IS, TH AT THE DEPARTMENT HAS INITIATED PENALTY PROCEEDINGS. WE HAVE BEEN INFORM ED THAT THE LD.CIT(A) HAS ALREADY DELETED THE PENALTY. THOUGH ANY OBSERVATION WITH REGARD TO THE PENALTY PROCEEDINGS WILL AMOUNT TO AN ADVANCE AUTHORITY, BECAUSE THAT DISPUTE IS NOT BEFORE US, BUT, TO OUR MIND THIS SURRENDER OF ADDITION FOR TAXATION WILL NOT COME IN THE WAY OF A SSESSEE FOR EXPLAINING HER POSITION AS TO WHY SHE SHOULD NOT BE VISITED WI TH PENALTY, THAT PROCEEDINGS IS AN INDEPENDENT PROCEEDINGS AND TO BE DEALT WITH INDEPENDENTLY. SUBJECT TO THE ABOVE OBSERVATIONS, THIS GROUND OF THE APPEAL IS REJECTED IN BOTH THE ASSESSMENT YEARS. 9. IN THE ASSTT.YEAR 2006-07, THERE IS ONE MORE GRO UND OF APPEAL, WHEREBY, THE ASSESSEE HAD CHALLENGED CONFIRMATION O F DISALLOWANCE OF RS.2,10,155/-. 10. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS CLAIMED VARIOUS EXPENSES VIZ. OFFICE EXPENDITURE OF RS.2,31,000/-, BANK CHARGES, DEMAT AND SERVICE AND SECURITY CHARGES ETC THE TOTAL EXP ENDITURE CLAIMED BY THE ASSESSEE WERE AT RS.2,57,931/-. THE LD.AO HAS DISALLOWED A SUM OF RS.2,31,100/- OUT OF OFFICE EXPENSES AND LEGAL R EGISTRATION EXPENSES OF RS.12,140/-. 11. ON APPEAL, THE LD.CIT(A) CONFIRMED THE DISALLOW ANCE OF RS.2,10,155/-. THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET CONTENDED THAT IN THE ASSTT.YEAR 2008-09, SIMILAR E XPENDITURES HAVE BEEN CLAIMED BY THE ASSESSEE, WHICH HAVE NOT BEEN D ISALLOWED BY THE AO HIMSELF. IN THIS ASSESSMENT YEAR, THE EXPENSES HAVE BEEN DISALLOWED BY THE AO ON THE GROUND THAT THESE EXPEN SES HAVE NO ITA NO.168/AHD/2011 (2 APPEALS) 5 BEARING ON THE EARNING OF THE TAXABLE INCOME OFFERE D BY THE ASSESSEE. IN OUR OPINION, WHEN THE AO HIMSELF HAS ACCEPTED TH E STAND OF THE ASSESSEE IN SUBSEQUENT YEAR ON THE SIMILAR NATURE O F INCOME, THEN THIS YEAR ALSO NO EXPENDITURE OUGHT TO BE DISALLOWED. C ONSIDERING THE STAND OF THE REVENUE IN SUBSEQUENT YEAR, WE ALLOW THIS GR OUND OF APPEAL AND DELETE THE DISALLOWANCE IN THE ASSTT.YEAR 2007-07. 12. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE A SSTT.YEAR 2006-07 IS PARTLY ALLOWED AND THE APPEAL FOR THE ASSTT.YEAR 20 08-09 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 8 TH DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER