Sri. B. Nanjamari, Tiptur V. ACIT, Tumkur

ITA 1452/BANG/2010

• Counselvise Citation: 145221114 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 16-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSAN THOMAS JOSE
• Keywords: Salary income; Reasonable cause; Condonation of delay
• Section: 10(14); 234B; 147; 148; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.A. NO.739/BANG/2011 & 1452/BANG/2010 (ASSESSMENT YEARS : 2005-06 & 2006-07) SHRI B. NANJAMARI, EX-MLA, BELAGARAHALLI, TIPTUR-572 202 PAN AILPN 2564K . APPELLANT. VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1, TUMKUR. .. RESPONDENT. APPELLANT BY : SHRI BALRAM R. RAO. RESPONDENT BY : SHRI SUSAN THOMAS JOSE. DATE OF HEARING : 30.04.2012. DATE OF PRONOUNCEMENT : 04.05.2012. O R D E R PER BENCH : ORDER ON PETITION FOR CONDONATION OF DELAY IN FILIN G APPEAL [ASST. YEAR 2005-06 (ITA NO.739/BANG/2011)] THE ASSESSEE FILED THE FORM NO.36 FOR ASSESSMENT YEAR 2005-06 DT.2.1.2011. ON EXAMINATION THEREOF IT WAS NOTICED THAT THE APPEAL OUGHT TO HAVE BEEN FILED ON OR BEFORE 20.12.2010, IT WAS FILED ON 2.8.2011 THEREBY LEADIN G TO A DELAY OF 228 DAYS. ON THIS BEING POINTED OUT BY THE REGISTRY, THE ASSESSEE HAS FILED AN AFFIDAVIT DT.17.11.2011 GIVING REASONS FOR THE DELAY AND SEEKING CONDONATION OF THE SAID D ELAY. THE SAME HAS BEEN DULY PERUSED AND CONSIDERED, FOR THE REASONS STATED IN THE AFFID AVIT, WE ARE OF THE VIEW THAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN FILIN G THE APPEAL IN TIME AND THEREFORE IN THE INTEREST OF JUSTICE, CONDONE THE DELAY OF 228 D AYS AND ADMIT THE APPEAL FOR HEARING AND DISPOSAL. 2 ITA NOS.739/BANG/2011 & 1452/BANG/2010 O R D E R 2. THE TWO APPEALS FOR ASSESSMENT YEARS 2005-06 AND 2006-07 ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEA LS)-II, BANGALORE BOTH DATED 31.08.2010. THESE TWO APPEALS ARE BEING DISPOSED O F BY WAY OF A CONSOLIDATED ORDER AS COMMON ISSUES ARE INVOLVED. 3.1 THE FACTS OF THE CASE, IN BRIEF, ARE AS UNDER : 3.1.1 THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN S OF INCOME FOR BOTH ASSESSMENT YEARS 2005-06 & 2006-07 ON 9.3.2009 DECLARING INCOME OF R S.90,740 & RS. 1.18.540 RESPECTIVELY. THE RETURNS OF INCOME FOR BOTH THESE YEARS WERE FILED ONLY PURSUANT TO PROCEEDINGS INITIATED UNDER SECTION 147 AND NOTICES ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED AS 'THE ACT'). THE ASSESSING OFFICER NOTED THAT DURING THE RELEVANT PERIOD, THE ASSESSEE WAS A N MLA DRAWING SALARY, PENSION AND OTHER ALLOWANCES FROM THE GOVT. OF KARNATAKA. THE ASSESSEE HAD CLAIMED EXEMPTION TO THE EXTENT OF RS.3,17,585 AND RS. 4,22,901 FOR ASSESSME NT YEAR 2005-06 & 2006-07 RESPECTIVELY. THE ASSESSING OFFICER AFTER EXAMINAT ION OF THE ASSESSEES CLAIMS, NOTED THAT DAILY ALLOWANCE WAS FULLY EXEMPT UNDER SECTION 10(17)(I) AND OTHER ALLOWANCES WERE EXEMPT @ RS. 2,000 PER MONTH UNDER SECTION10(17)(II I) OF THE ACT AND AFTER ALLOWING THE ELIGIBLE EXEMPTION TO THIS EXTENT DETERMINED THE TA XABLE INCOME OF THE ASSESSEE AT RS. 3,08,325 AND RS. 4,02,641 RESPECTIVELY. 3.1.2 AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE CLAIMS OF THE ASSESSEE, DISMISSED T HE ASSESSEES APPEALS FOR BOTH ASSESSMENT YEARS UNDER CONSIDERATION BY ORDER DT.31 .8.2010. 4.0 THE ASSESSEE IS NOW BEFORE US CHALLENGING THE O RDER OF THE CIT(A). 5.1 IN THESE APPEALS, THE ASSESSEE HAS RAISED SIMIL AR GROUNDS OF APPEAL, FOR BOTH ASSESSMENT YEARS UNDER CONSIDERATION. THE GROUNDS FOR ASSESSMENT YEAR 2005-06 ARE REPRODUCED HEREUNDER: 3 ITA NOS.739/BANG/2011 & 1452/BANG/2010 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) ERRED IN PASSING THE ORDER IN THE MANNER IN WHICH HE DID. 2. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE APPELLANT BEING AN MLA, THE HONORARIUM AND ALLOWANCES RECEIVED WHICH I S SUBJECT TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES THE CLAIM OF DEDUC TION OF RS. 2,17,585 AS MADE BY THE APPELLANT UNDER SECTION 57 OF THE ACT I S IN ORDER. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE CLAIM OF THE APPELLANT TOWARDS EXEMPTION AND DEDUCTION OF RS. 3, 17,585 IS TWO FOLD, I.E. EXEMPTION OF RS. 1,00,000 UNDER SECTION 10(17) AND DEDUCTION OF RS. 2,17,585 UNDER SECTION 57 OF THE ACT. 4. THE LEARNED CIT(A) ERRED IN EQUATING THE CLAIM OF DEDUCTION OF RS. 2,17,585 UNDER SECTION 57 OF THE ACT WITH REFERENCE TO THE P ROVISIONS OF SECTION 10(17) OF THE ACT WHICH IS NOT AS PER THE LAW. 5. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE EXPENDITURE CLAIMED WAS FOR EARNING THE INCOME AND THUS WAS LIABLE TO B E ALLOWED UNDER SECTION 57 OF THE ACT. 6. THE LEARNED CIT(A) OUGHT NOT TO HAVE CONFIRMED THE ADDITION OF RS. 2,17,585 AS MADE BY THE ASSESSING OFFICER AND DELET ED THE SAME IN TOTO. 7. WITHOUT PREJUDICE, THE ADDITION IS ARBITRARY, E XCESSIVE AND OUGHT TO BE REDUCED SUBSTANTIALLY. 8. THE LEARNED CIT(A) OUGHT TO HAVE DELETED THE LE VY OF INTEREST UNDER SECTIONS 234A AND 234B OF THE ACT. 9. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. THE GROUNDS RAISED FOR ASSESSMENT YEAR 2006-07 ARE SIMILAR EXCEPT FOR THE FIGURES OF DISALLOWANCES. 5.2 THE GROUNDS RAISED AT S.NOS.1, 7 AND 9 FOR BOTH YEARS ARE GENERAL IN NATURE AND NO ADJUDICATION IS CALLED FOR THEREON. 5.3 IN THE GROUNDS RAISED AT S.NOS.2 TO 6 FOR BOTH ASSESSMENT YEARS THAT THE ASSESSEE HAS NO DISPUTE WITH THE ORDERS OF THE ASSESSING OFF ICER AND CIT(A) AS REGARDS THE EXTENT OF EXEMPTION ALLOWED TO HIM UNDER SECTION 10(17) OF THE ACT. THE ISSUE OF DISPUTE APPEARS TO BE THAT, SINCE HIS INCOME IS ASSESSABLE UNDER TH E HEAD INCOME FROM OTHER SOURCES, THE ASSESSING OFFICER AND CIT(A) OUGHT TO HAVE ALLOWED THE OTHER EXPENDITURE CLAIMED AS A DEDUCTION UNDER SECTION 57 OF THE ACT. 4 ITA NOS.739/BANG/2011 & 1452/BANG/2010 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE, BEING AN MLA, THE HONORARIUM AND OTHER ALLOWANCES RECEIVED WAS TO BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES AND CONSEQUENTLY HE WAS ELIGIBL E BOTH FOR EXEMPTION UNDER SECTION 10(17) AND DEDUCTION UNDER SECTION 57 OF THE ACT, WHEREAS THE ASSESSING OFFICER AND CIT(A) WHILE GRANTING HIM ELIGIBLE EXEMPTION UNDER SECTION 10(17) OF THE ACT DID NOT ALLOW HIM DEDUCTION UNDER SECTION 57 OF THE ACT. IT WAS F URTHER SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT WHILE THE LEARNED CIT (A) HAD APPLIED AND FOLLOWED THE DECISION OF THE TRIBUNAL, VISAKHAPATNAM BENCH IN TH E CASE OF M. VENKATA SUBBAIAH VS. ITO (2010) 127 ITD 399 TO GRANT EXEMPTION UNDER SECTION 10(14) AND 10(17) OF THE ACT READ WITH RULE 2BB(1) OF THE INCOME TAX RULES, THE LEARN ED CIT(A) HAD ERRED IN NOT ALLOWING THE ASSESSEE DEDUCTION UNDER SECTION 57(III) OF THE ACT IN RESPECT OF EXPENDITURE INCURRED ON TELEPHONE, CONVEYANCE, TRAVELLING EXPENSES ETC C LAIMED. IN SUPPORT OF THE PROPOSITION THAT THESE EXPENSES ARE ALLOWABLE AS A DEDUCTION UN DER SECTION 57(III) OF THE ACT, THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE HON'BLE ITAT, INDORE BENCH IN THE CASE OF JASWANT SINGH VS. ITO R EPORTED IN 096 TTJ 660 AND PRAYED THAT THE CLAIM OF THE ASSESSEE BE ALLOWED. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE CONTRARY, STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES THAT THE ASSESSEE S CLAIM FOR EXEMPTION UNDER SECTION 10(17) AND 10(14)HAVE BEEN CONSIDERED BOTH BY THE A SSESSING OFFICER AND THE LEARNED CIT(A) AND THAT THE LEARNED CIT(A) HAD CORRECTLY RE LIED ON THE DECISION IN THE CASE OF M. VENKATA SUBBAIAH (SUPRA) IN UPHOLDING THE ASSESSING OFFICERS FINDING WHICH WAS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10(14) R W RULE 2BB(I) AND SECTION 10(17) OF THE ACT. THE LEARNED D.R. POINTED OUT THAT THE LEARNED CIT(A) HAD NOTED THAT EVEN IN RESPECT OF CONVEYANCE ALLOWANCE AND CLERICAL ALLOWANCE, NO DOCUMENTARY PROOF WAS FILED FOR GRANT OF SUCH ALLOWANCES AND EXPENSES THEREOF. IT WAS AL SO CONTENDED THAT THE ASSESSEES CLAIM FOR DEDUCTION OF EXPENDITURE UNDER SECTION 57 WAS I NCORRECT AND HE WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 57(III) AS CLAIMED BY HIM. IN THIS REGARD THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE DECISION OF THE HON'B LE GUJARAT HIGH COURT IN THE CASE OF SMT. VIRMATI RAMKRISHNA VS. CIT REPORTED IN 131 ITR 659 WHICH HAS LAID OUT THE TESTS TO 5 ITA NOS.739/BANG/2011 & 1452/BANG/2010 BE APPLIED AS TO WHETHER THE EXPENDITURE INCURRED W AS PERMISSIBLE UNDER SECTION 57(III) OF THE ACT. FINALLY IT WAS PRAYED BY THE LEARNED DEPA RTMENTAL REPRESENTATIVE THAT THE ORDERS OF THE LOWER AUTHORITIES BE UPHELD. 8. WE HAVE HEARD BOTH PARTIES, CAREFULLY PERUSED TH E ORDERS OF AUTHORITIES BELOW, THE MATERIAL ON RECORD AND THE JUDICIAL DECISIONS REFER RED TO. THERE IS NO DISPUTE THAT SALARY AND ALLOWANCES OF MLAS ARE TO BE ASSESSED UNDER T HE HEAD INCOME FROM OTHER SOURCES AND NOT UNDER THE HEAD SALARY AS HELD IN THE CASE OF CIT VS. SHIV CHARAN MATHUR REPORTED IN (2008) 306 ITR 126 (RAJ). IN THE INSTANT CASE, THERE IS NO DISPUTE RAISED WITH REGARD TO THE EXEMPTION GIVEN FOR ALLOWANCES GRANTED TO THE A SSESSEE BY THE STATE BY THE AUTHORITIES BELOW WHEREEVER EVIDENCE WAS PRODUCED T O THEIR SATISFACTION, IN ACCORDANCE WITH SECTION 10(14) READ WITH RULE 2BB(1) OF THE I T RULES, 1962 AND SECTION 10(17) OF THE ACT, FOLLOWING THE DECISION OF THE TRIBUNAL, VISAKH APATNAM BENCH IN THE CASE OF M. VENKATA SUBBAIAH (SUPRA). IN PARA 21 THEREOF THE TRIBUNAL HAS HELD THAT : 21 FROM A CAREFUL STUDY OF THE AMENDMENTS BROUGH T TIME TO TIME IN SECTION 10(17) OF THE ACT, WE ARE OF THE VIEW THAT LEGISLAT URE HAS BEEN QUITE CONSCIOUS ABOUT THE ALLOWANCES GRANTED TO THE MLAS OR THE MPS AND TIME TO TIME THEY ARE BRINGING ENACTMENTS TO GRANT EXEMPTION OF PARTI CULAR TYPE OF ALLOWANCES FROM THE TOTAL INCOME OF THE MLAS OR MPS. HAD IT B EEN A CASE THAT FOR ALL ALLOWANCES SECTION 10(14) CAN BE INVOKED SUBJECT TO PROOF OF THE EXPENDITURE TO BE INCURRED IN RESPECT OF THAT PURPOSE TO WHICH THE ALLOWANCES ARE GIVEN, THERE WOULD BE NO NEED TO MAKE A NECESSARY AMENDMENT TIME TO TIME IN SECTION 10(17). WE ARE, THEREFORE, OF THE VIEW THAT WHILE D EALING WITH THE ISSUE OF SPECIAL ALLOWANCES GRANTED TO THE MLAS OR MPS HAS TO KEEP IN MIND BOTH THE PROVISIONS OF SECTIONS 10(17) AND 10(14) OF THE ACT AND ONLY THOSE ALLOWANCES ARE TO BE EXEMPTED FROM THE TOTAL INCOME OF THE ASS ESSES WHICH ARE SPECIFIED IN THESE SECTIONS OR RULE 2BB OF IT RULES. UNDER S ECTION 10(17), THE LEGISLATURE HAS PRESCRIBED A PARTICULAR LIMIT UP TO WHICH THE A LLOWANCES ARE TO BE EXEMPTED FROM THE TOTAL INCOME OF THE ASSESSEES BU T SECTION 10(14) IS TO BE READ WITH RULE 2BB OF THE IT RULES AND ONLY THOSE A LLOWANCES ARE TO BE ALLOWED TO BE EXEMPTED FROM THE TOTAL INCOME OF THE ASSESSE ES WHICH ARE SPECIFICALLY MENTIONED IN RULE 2BB SUBJECT TO PROOF OF ITS BEING SPENT FOR THE PURPOSE TO WHICH IT IS RECEIVED OR GRANTED. WE, THEREFORE, SE T ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF ASSESS ING OFFICER WITH A DIRECTION TO RE-EXAMINE THE ISSUE AND GRANT AN EXEM PTION OF THE CONVEYANCE ALLOWANCE AND THE CLERICAL ALLOWANCE AFTER MAKING N ECESSARY VERIFICATION OF THE 6 ITA NOS.739/BANG/2011 & 1452/BANG/2010 EXPENDITURE INCURRED FOR THE SAID PURPOSE. REST O F THE ALLOWANCES I.E. TELEPHONE ALLOWANCE, CONSULTANCY ALLOWANCE AND CONT INGENCY ALLOWANCE DO NOT FALL EITHER IN THE PURVIEW OF SECTION 10(14) OR 10(17) A ND THEY CANNOT BE ALLOWED TO BE EXEMPTED FROM THE TOTAL INCOME OF THE ASSESSEES. SO FAR AS MEDICAL ALLOWANCES ARE CONCERNED, THE ASSESSING OFFICER SHO ULD VERIFY THE NATURE OF THESE ALLOWANCES. IF IT IS A REIMBURSEMENT OF THE MEDICAL EXPENSES INCURRED BY THE MLA, IT MAY BE ALLOWED IN THE LIGHT OF THE JUDG MENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF SHIV CHARAN MATHUR (SUPRA). O THERWISE, NO EXEMPTION CAN BE ALLOWED AS IT DOES NOT FALL EITHER IN THE PURVIE W OF SECTION 10(14) AND 10(17) OF THE INCOME TAX ACT. 8.1 THE DISPUTE IN THESE APPEALS IS BASICALLY THAT FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION, THE LEARNED CIT(A) ERRED IN NOT ALLO WING THE ASSESSEES CLAIM FOR DEDUCTION OF EXPENDITURE UNDER SECTION 57(III) AGAINST ITS IN COME UNDER THE HEAD OTHER SOURCES. IN SUPPORT OF THIS PROPOSITION, THE LEARNED AUTHORISED REPRESENTATIVE PLACED RELIANCE ON THE DECISION OF THE ITAT, INDORE BENCH IN THE CASE OF J ASWANT SINGH VS. ITO REPORTED IN 96 TTJ 660 (2005) AND HAS FILED A COPY THEREOF IN THE COURSE OF HEARING. WE HAVE CAREFULLY PERUSED THE SAID DECISION AND FIND THAT IT WOULD NO T COME TO THE ASSESSEES RESCUE. RATHER, HIS CASE IS ADVERSELY HIT BY THE FINDING TH EREIN. THE INDORE BENCH OF ITAT IN THE CASE OF JASWANT SINGH (SUPRA) HAD AN OCCASION TO EX AMINE THE SAME ISSUE OF WHETHER DEDUCTION OF EXPENDITURE IS TO BE ALLOWED UNDER SEC TION 57 OF THE ACT FROM OUT OF THE SALARY INCOME AND OTHER ALLOWANCES GRANTED TO AN ML A, WHICH IS TO BE ASSESSED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. THE BE NCH AFTER EXAMINATION OF THIS ISSUE CAME TO THE FOLLOWING FINDING WHICH PORTION IS REPR ODUCED HEREUNDER : THE LEARNED COMMISSIONER (APPEALS) ALSO DISCUSSED THE PROVISION LAID DOWN UNDER SECTION 57 OF THE ACT AND WAS OF THE VIEW THA T THE SAME DOES NOT PROVIDE FOR ANY DEDUCTION FOR SUCH INCOME. THE LEA RNED COMMISSIONER (APPEALS) ACCORDINGLY, CAME TO THE CONCLUSION THAT IN THE SCHEME OF TAXING THE INCOME FROM OTHER SOURCES, THE INCOME TAX ACT, 1961 , DID NOT PROVIDE FOR ANY DEDUCTION UNDER SECTION 57 FROM THE FIXED SALARY AN D ALLOWANCES RECEIVED BY THE ASSESSEE BY VIRTUE OF HIS ELECTION TO THE STATE LEGISLATIVE AND THE ASSESSEE COULD NOT HAVE BEEN ALLOWED HIS ESTIMATED CLAIM OF DEDUCTION OF RS. 79,016. THE SAME HAS BEEN QUESTIONED BY THE ASSESSEE BEFORE US. WE AFTER CAREFULLY CONSIDERING THE ARGUMENTS ADVANCED BY THE PARTIES A ND THE ORDERS OF THE LOWER AUTHORITIES FIND FORCE IN THE FIRST APPELLATE ORDER BUT WITH THIS MODIFICATION THEREIN ON OUR PART TO THIS EXTENT THAT THE ASSESSE E WAS VERY MUCH ENTITLED TO 7 ITA NOS.739/BANG/2011 & 1452/BANG/2010 THE CLAIMED ALLOWANCES ONLY FOR THE AMOUNT ALLOWED IN THE CERTIFICATE DATED 25.9.2002, ISSUED BY THE DY. SECRETARY, MADHYA PRAD ESH LEGISLATIVE ASSEMBLY FOR THE YEAR RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION FOR THE MEMBERS OF MADHYA PRADESH LEGISLATIVE ASSEMBLY, MEN TIONED IN PARA NO.16 OF THE FIRST APPELLATE ORDER. AFTER REIMBURSEMENT OF THE ENTITLED ALLOWANCES FROM THE CLAIM, THE REMAINING AMOUNT IS DIRECTED TO BE TAXED AS INCOME OF THE ASSESSEE FROM OTHER SOURCES UNDER SECTION 56 OF THE INCOME TAX ACT, 1961. THIS FINDING OF THE TRIBUNAL, IN OUR CONSIDERED OPI NION, CLEARLY UPHOLDS THE VIEW THAT THE PROVISIONS OF SECTION 57 OF THE ACT DO NOT PROVIDE FOR ANY DEDUCTION OF EXPENDITURE FROM SUCH SALARY INCOME, ETC OF AN MLA. ONLY THOSE EXEM PTIONS AS LAID OUT AS PER THE PROVISIONS OF SECTION 10(14) READ WITH RULE 2BB(1) AND SECTION 10(17) OF THE ACT ARE ALLOWABLE FROM AN MLAS SALARY AND OTHER ALLOWANCES GRANTED IN SUCH C APACITY AS HELD IN THE CASE OF M. VENKATA SUBBAIAH (SUPRA). APPLYING THE SAME RATIO TO THE INSTANT CASE, WE UPHOLD THE LEARNED CIT(A)S ACTION IN REJECTING THE ASSESSEES CLAIM FOR ALLOWING DEDUCTION OF EXPENDITURE UNDER SECTION 57 OF THE ACT AND ACCORDI NGLY DISMISS THE ASSESSEES GROUNDS RAISED AT S.NOS. 2 TO 5. 9. THE GROUND RAISED AT S.NO.8 CHALLENGES THE CHARGING OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT. THE CHARGE OF INTEREST B EING CONSEQUENTIAL AND MANDATORY IN NATURE, THE ASSESSING OFFICER HAD NO DISCRETION IN THE MATTER AND HIS ACTION IS THEREFORE UPHELD. THE ASSESSING OFFICER IS, HOWEVER, DIRECTE D TO RECOMPUTE THE INTEREST CHARGEABLE, IF ANY, WHILE GIVING EFFECT TO THIS ORD ER. 10. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR BOTH ASSESSMENT YEARS 2005-06 & 2006-07 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MAY, 2012. SD/- SD/- (P. MADHAVI DEVI) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 04.05.2012. *REDDY GP 8 ITA NOS.739/BANG/2011 & 1452/BANG/2010 COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, - B BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDE R ASSTT. REGISTRAR, ITAT, BANGALORE