SHEELA BHOGILAL, MUMBAI V. ITO 16(2)(1), MUMBAI

ITA 1488/MUM/2014

• Counselvise Citation: 148819914 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 04-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIALDR
• Assessee Lawyers: V MOHAN
• Keywords: Gift; Salary income; Rule of consistency

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI ,!' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.1488/MUM/2014 ASSESSMENT YEAR: 2009-10 SHEELA BHOGILAL, 39, GOLD CROFT, BHULABHAI DESAI ROAD, MUMBAI-400026 / VS. INCOME TAX OFFICER-16(2)(1), MUMBAI. / ASSESSEE / REVENUE P.A. NO. AAEPB9579R $%& / ASSESSEE BY SHRI V. MOHAN $%& / REVENUE BY SHRI A.K.DHONDIAL-DR / DATE OF HEARING 10/06/2015 & / DATE OF ORDER: 10/06/2015 &/ O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY IMPUGNED ORDER DATED 23/01/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE STAND OF THE ASSESSING OFFICER THAT THE ASSESSEE IS NOT ENTITLE TO THE CREDIT FOR THE TDS AMOUNT OF RS.90,640/- IN A CASE WHERE T HE SUBJECT AMOUNT IS TAXABLE U/S 64(1)(IV) IN THE HAND S OF THE DONOR. ITA NO.1488/MUM/2014 SHEELA BHOGILAL 2 2. DURING HEARING OF THIS APPEAL, I HAVE HEARD SHR I V. MOHAN, LD. COUNSEL FOR THE ASSESSEE AND SHRI A.K. D HONDIAL, LD. DR. THE CRUX OF ARGUMENT ON BEHALF OF THE ASSE SSEE IS THAT THE FATHER-IN-LAW, DONOR PAID THE FULL TAX FOR WHICH THE LD. COUNSEL FILED THE COPY OF THE COMPUTATION OF TH E TOTAL INCOME IN THE CASE OF SHRI PRATAP BHOGILAL FOR THE YEAR ENDING 31 ST MARCH, 2009. COPY OF THE SAME WAS ALSO PROVIDED T O THE LD. DR. IT WAS ALSO CONTENDED BY THE LD. COUNSEL T HAT THE ASSESSING OFFICER GIVE THE CREDIT OF TDS IN EARLIER AND LATER YEARS. RELIANCE WAS ALSO PLACED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF ARVIND MURJANI BRANDS (P. ) LTD. VS ITO (2012) 137 ITD 173 (MUM.). THE LD.DR, DEFENDED THE CONCLUSION ARRIVED IN THE IMPUGNED ORDER. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DERIVES INCOME FROM SALARY, B USINESS AND OTHER SOURCES. THE ASSESSEE IN HER RETURN DECL ARED INCOME OF RS.10,21,835/-, FILED ON 30/07/2009. THE ASSESSEE RECEIVED A GIFT OF RS. 1 CRORE FROM SHRI P RATAP BHOGILAL (FATHER-IN-LAW OF THE ASSESSEE) IN THE YEA R 1999. THE AMOUNT RECEIVED IN THE FORM OF GIFT WAS INVESTED BY THE ASSESSEE IN TAX FREE RBI BONDS. ON MATURITY OF THE SE BONDS, IN THE YEAR 2005, THE AMOUNT WAS REINVESTED IN TAXA BLE BONDS OF RBI. SINCE, THE ASSESSEE EARNED INTEREST OUT OF FUNDS RECEIVED IN GIFT THE INTEREST INCOME WAS CLUB BED IN THE HANDS OF SHRI PRATAP BHOGILAL (DONOR), AS PER THE P ROVISIONS OF SECTION 64(1)(IV) OF THE ACT. BUT THE CREDIT OF TDS WAS CLAIMED ITA NO.1488/MUM/2014 SHEELA BHOGILAL 3 IN THE HANDS OF THE ASSESSEE. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED INTEREST INCOM E OF RS.10,40,000/- OUT OF WHICH INCOME OF RS.8 LAKH WAS NOT OFFERED FOR TAX IN THE HANDS OF THE ASSESSEE AS THE INCOME WAS CLUBBED IN THE HANDS OF SHRI PRATAP BHOGILAL U/S 64 (1)(VI), WHO OFFERED THE SAME TO TAX. SINCE THE INTEREST IN COME OF RS.8 LAKH WAS NOT INCLUDED IN THE TAXABLE INCOME OF THE ASSESSEE, CREDIT FOR TDS ON THIS AMOUNT OF RS.90,64 0/- WAS NOT ALLOWED TO THE ASSESSEE. THE ASSESSING OFFICER TOOK THE VIEW THAT IN TERMS OF SECTION 199(1) OF THE ACT REA D WITH SECTION 37BA OF THE INCOME TAX RULES, THE CREDIT IS REQUIRED TO BE ALLOWED ONLY IN THE HANDS OF SUCH OTHER PERSO N IN WHOSE HANDS THE INCOME IS CLUBBED. ON APPEAL, BEFO RE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE STAND TAKEN IN THE ASSESSMENT ORDER, BY THE ASSESSING OFFICER, WAS AFFIRMED AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, THERE IS NO DISPUTE TO THE FACT THAT THE DONOR PAID THE TAXES, THUS, THERE IS NO LO SS TO THE REVENUE. OBLIGATION FOR DEDUCTION OF TAX AT SOURCE FALLS ON THE PAIR OF THE TAX. THE AMOUNT OF TAX, DEDUCTED A T SOURCE NEEDS TO BE ADJUSTED AGAINST THE TAX LIABILITY OF T HE PAYEE. SINCE THE INTEREST AMOUNT SUFFERED TAXATION AND THE REVENUE HAS RECEIVED THE DUE TAXES, THUS, THERE IS NO QUEST ION OF DOUBLE DEDUCTION. THE AMOUNT OF TAX DEDUCTED AT SO URCE ITA NO.1488/MUM/2014 SHEELA BHOGILAL 4 NEEDS TO BE ADJUSTED AGAINST TAX LIABILITY OF THE P AYEE AND IN CASE, THERE IS NO SUCH LIABILITY, IT HAS TO BE REFU NDED TO THE PAYEE. MAJOR FUNCTION OF SECTION 199 IS TO ALLOW C REDIT FOR TAX DEDUCTED AT SOURCE TO THE PAYEE, SINCE THE AMOUNT O F INTEREST INCOME HAS SUFFERED TAXATION, IT CANNOT BE CHARGED AGAINST IN THE HANDS OF THE ASSESSEE, MORE SPECIFICALLY, WHEN THE REVENUE HAS RECEIVED TAX, DUE ON SUCH INTEREST INCO ME FROM SHRI PRATAP BHOGILAL. SINCE, THE ASSESSING OFFICER HAD BEEN ACCEPTING SUCH CLAIM OF THE ASSESSEE IN EARLIER AND LATER YEARS, NO U TURN IS PERMITTED IN THE PRESENT ASSESS MENT YEAR IN THE PRESENCE OF IDENTICAL FACT. NO CONTRARY FAC TS WERE BROUGHT ON RECORD BY THE REVENUE, THEREFORE, IN VIE W OF THE PRINCIPLE OF CONSISTENCY ALSO, THE APPEAL OF THE AS SESSEE DESERVES TO BE ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE S IDES AT THE CONCLUSION OF THE HEARING ON 10 TH JUNE 2015. SD/- (JO GINDER SINGH) !' / JUDICIAL MEMBER MUMBAI; DATED : 10/06/2015 F{X~{T? P.S / ! &$)!*+,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI ITA NO.1488/MUM/2014 SHEELA BHOGILAL 5 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI