ITO, Ward-12(4), Hyderabad V. Sri Gampa Nageswara Rao, Hyderabad

ITA 1382/HYD/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7129 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 27-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: CHAITANYA KUMAR
• Keywords: Assessment record
• Section: 10(14); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, A.M. & SMT. ASHA VIJAYARAGHAVAN, J.M. ITA NO.1382/HYD/2011 ASSESSMENT YEAR 2004-05 THE ITO, WARD 12(4), HYDERABAD VS SRI GA MP A NAGESWARA RAO, HYDERABAD. (PANABGPG1688K) APPELLANT RESPONDENT APPELLANT BY : SHRI K.J. RAO RESPONDENT BY : SHRI CHAITANYA KUMAR DATE OF HEARING : 15.11.2011 DATE OF PRONOUNCEMENT : 22.11.2011 ORDER PER ASHA VIJAYARAGHAVAN, JM: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) II, HYDERAB AD 23.5.2011 AND PERTAINS TO THE ASSESSMENT YEAR 2004- 05. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN EMPLOYEE OF LIC OF INDIA, FILED HIS RETURN OF INCOM E ON 19.7.2004 CLAIMING A REFUND OF RS.1,15,150/-. THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WE RE ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE AND THEREA FTER, THE ASSESSMENT WAS COMPLETED U/S 144 OF THE IT ACT DISA LLOWING THE CLAIM OF CONVEYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE OF RS.3,47,561/-. 3. AGGRIEVED AGAINST THE ORDER THE ASSESSEE PREFER RED AN APPEAL BEFORE THE CIT(A). THE ASSESSEE CONTENDED T HAT THE ITA NO.1382 OF 2011 SHRI G. NAGESWARA RAO, HYDERABAD 2 ENTIRE AMOUNT OF CONVEYANCE ALLOWANCE AND ADDITIONA L CONVEYANCE ALLOWANCE WAS GRANTED FOR THE PURPOSE OF EMPLOYMENT AND THE SAME WAS TREATED AS DEDUCTION BY THE LIC OF INDIA IN FORM NO.16 AND HENCE THE SAME SHOUL D BE ALLOWED. THE ASSESSEE RELIED ON THE ORDER OF THIS TRIBUNAL DATED 23.11.2006 IN THE CASE OF SHRI G. RAMA MURTHY REDDY, HYDERABAD VS. ACIT IN ITA NOS.914 & 915/HYD/2004. 4. THE CIT(A) HELD THAT THE FACTS OF THE ASSESSEE S CASE ARE EXACTLY IDENTICAL TO THE CASE OF SHRI G. RAMA MURTH Y REDDY AND ALSO OBSERVED THAT FROM THE ASSESSMENT RECORDS, THE CONVEYANCE ALLOWANCE OF RS.23,986/- AND ADDITIONAL CONVEYANCE ALLOWANCE OF RS.3,23,578/- WERE TREATED AS DEDUCTION BY THE LIC AND CERTIFIED IN FORM NO.16. HENCE FOLLOWING THE DECISION OF THE TRIBUNAL, THE CIT(A) TREATED THE CONVEYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLO WANCE AS EXEMPT U/S 10(14) OF THE ACT. 5. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE U S AND RAISED THE FOLLOWING GROUNDS: 1. THE CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW 2. THE CIT(A) ERRED IN ALLOWING EXEMPTION OF 50% O F THE ADDITIONAL CONVEYANCE ALLOWANCE OVER AND ABOVE WHAT HAS BEEN CERTIFIED BY THE EMPLOYER IN FORM NO.16. 3. THE CIT(A) OUGHT TO HAVE UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SINCE THE ASSESSEE HA S FAILED TO PROVE THAT THE ADDITIONAL CONVEYANCE ALLOWANCE WAS SPENT WHOLLY, NECESSARILY AND EXCLUSIVELY FOR THE PURPOSE OF CONVEYANCE IN THE PERFORMANCE OF HIS DUTIES. ITA NO.1382 OF 2011 SHRI G. NAGESWARA RAO, HYDERABAD 3 4. THE CIT(A) OUGHT TO HAVE GRANTED RELIEF BASED O N THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI G. RAM A MURTHY WHEN THE SAME WAS NOT ACCEPTED BY THE DEPARTMENT AND A FURTHER APPEAL BEFORE THE HIGH COU RT IS PENDING. 6. WE HEARD BOTH THE PARTIES. WE FIND THAT THE TR IBUNAL VIDE ITS ORDER DATED 23.11.2006 IN ITA NOS.914 & 915/HYD/2004 IN THE CASE OF SHRI G. RAMA MURTHY RED DY VS. ACIT, HAS HELD AS FOLLOWS: AS A FINAL FACT FINDING AUTHORITY, WE TAKE UPON OU RSELVES TGE EXERCISE IF MAKING A REASONABLE ESTIMATION OF THE E XTENT TO WHICH THE ADDITIONAL CONVEYANCE ALLOWANCE RECEIVED BY THE DEVELOPMENT OFFICERS COULD BE GRANTED EXEMPTION IN TERMS OF S.10(14) OF THE ACT. WE ARE OF THE VIEW THAT AFTER ALLOWING EXEMPTION OF THE AMOUNT CERTIFIED BY THE LIC 50% OF THE BALANCE SHOULD FURTHER BE TREATED AS EXEMPT U/S 10( 14) OF THE ACT. THIS WILL, ON AN AVERAGE, TAKE CARE OF TH E SITUATION IN MAJORITY CASES WHERE EXPENSES MAY HAVE BEEN INCURRE D IN VARYING DEGREES, THOUGH DETAILS ARE NOT MAINTAINED. IT LEAVES OUT THE CASES OF VERY FEW OFFICERS WHO ARE METICULO US ENOUGH TO MAINTAIN THE DETAILS, WHO MAY BE GRANTED MORE EX EMPTION IF THE ASSESSING OFFICER IS SATISFIED WITH THE DETA ILS FURNISHED BY THEM. WHILE GRANTING 50% EXEMPTION IN THOSE CAS ES WHERE DETAILS ARE NOT MAINTAINED, WE HAVE KEPT IN V IEW OF THE FACT THAT SIMPLY BECAUSE DETAILS ARE NOT MAINTA INED IT CANNOT BE PRESUMED THAT NO EXPENDITURE HAS BEEN INC URRED BECAUSE WHAT IS GRANTED IS ONLY AN ALLOWANCE TO MEE T THE EXPENDITURE IN THE PERFORMANCE OF DUTIES, OUT OF WH ICH AGAIN SOME AMOUNT IS ASSESSED TO TAX, BY DENYING EXEMPTIO N. IN THE PROCESS, IT MAY BE TRUE THAT SOME ASSESSEES MAY TEND TO ITA NO.1382 OF 2011 SHRI G. NAGESWARA RAO, HYDERABAD 4 GAIN BY GETTING MORE EXEMPTION THAT WHAT IS SPENT, BUT THAT SHOULD NOT DETER US FROM MEETING THE ENDS OF JUSTIC E IN SUBSTANTIAL NUMBER OF CASES. BY THIS WAY, WE ARE M ITIGATING THE GRIEVANCE OF SUBSTANTIAL NUMBER OF DEVELOPMENT OFFICERS, AND IT IS ONLY THOSE WHO WANT TO CLAIM HIGHER AMOUN T OF EXEMPTION WHO HAVE TO SUBSTANTIATE THEIR CLAIM BEFO RE THE ASSESSING OFFICER WITH EVIDENCE OF EXPENSES INCURRE D IN THAT BEHALF. ACCORDINGLY, WE HOLD THAT OVER AND ABOVE T HE AMOUNT CERTIFIED BY THE LIC, THE ASSESSEE WILL ALSO BE ENT ITLED TO EXEMPTION TO THE EXTENT OF 50% OF THE BALANCE AMOUN T ADDITIONAL CONVEYANCE ALLOWANCE U/S 10(14) OF THE A CT, WHERE NO DETAILS ARE FURNISHED. IT IS CLARIFIED TH AT WHERE THE ASSESSEE FURNISHES THE DETAILS OF EXPENSES INCURRED , THEN ACTUAL EXPENDITURE INCURRED WILL BE THE AMOUNT OF E XEMPTION U/S 10(14) OF THE ACT. 7. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-O RDINATE BENCH OF THE TRIBUNAL, WE DISMISS THE APPEAL OF THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT 22.11.2011 SD/- SD/- (CHANDRA POOJARI) ( ASHA VIJAYA R AGHAVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED THE 22 ND NOVEMBER, 2011 COPY FORWARDED TO: 1. THE ITO, WARD 12(4), HYDERABAD 2. SHRI GAMPA NAGESWARA RAO, 3-6-771/776, FLAT NO.101, SAILAJA HEIGHTS, HIMAYAT NAGAR, HYDERABD 3. THE CIT(A)- II, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/