P.S.King, Kollam V. ITO, Kottayam

ITA 158/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58326 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 23-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: R KRISHNAN

Judgement Text

1 ITA NOS.156, 157 & 158/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.TA NOS. 156, 157 & 158/COCH/2010 (ASSESSMENT YEARS 2002-03, 2003-04 & 2005-06) P.S. KING VS ITO, WD.2 PASUPPARA ESTATE KOTTAYAM PASUPPARA PO, KOTTAYAM PAN : AFNPK7408N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R KRISHNAN RESPONDENT BY : SMT. VIJAYAPRABHA DATE OF HEARING : 27-02-2012 DATE OF PRONOUNCEMENT : 29-02-2012 O R D E R PER N.R.S. GANESAN (JM) ALL THESE APPEALS OF THE ASSESSEE WERE DISPOSED OF BY THIS TRIBUNAL BY AN ORDER DATED 30-06-2011. HOWEVER, THE ASSESSEE FILED MISCELLANEOUS APPLICATIONS IN M.P. NOS 33 TO 35/COCH/2011. THIS TRIBUNAL, AFT ER CONSIDERING THE MISCELLANEOUS APPLICATIONS RECALLED ITS ORDER DATED 30-06-2011 AND RESTORED THE APPEALS ON FILE TO CONSIDER THE APPLICABILITY OF TH E JUDGMENT OF THE APEX COURT IN ARUN KUMAR & OTHERS VS UOI (2006) 286 ITR 89 (SC). ACCORDINGLY, ALL THE THREE APPEALS WERE POSTED FOR DISPOSAL AGAIN. 2 ITA NOS.156, 157 & 158/COCH/2010 2. SHRI R KRISHNAN, THE LD.REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE ASSESSEE WAS FORCED TO STAY IN THE ESTATE TO SUPERV ISE THE ESTATE OPERATION AS PER THE RULES OF THE COMPANY. ACCORDING TO THE LD.REPR ESENTATIVE, THE ASSESSEE WAS NOT ALLOWED TO STAY OUTSIDE THE ESTATE. THE ASSESS EE HAS FILED A CERTIFICATE DATED 17-08-2009 FROM THE COMPANY TO SHOW THAT OUT OF COMPU LSION, THE ASSESSEE WAS FORCED TO STAY IN THE ESTATE BUNGALOW. THEREFORE, IT CANNOT BE CONSIDERED AS PERQUISITE IN VIEW OF THE JUDGMENT OF THE APEX COUR T IN THE CASE OF ARUN KUMAR & CO (SUPRA). ACCORDING TO THE LD.REPRESENTATIVE, TH E SPECIAL BENCH OF THIS TRIBUNAL HAS ALSO TAKEN SIMILAR VIEW IN THE CASE OF SAIPEM SP A VS ITO 76 ITD 101 (DEL)(SB). THEREFORE, EVEN THOUGH THE ASSESSEE HAS OFFERED FOR TAXATION 25% OF THE PERQUISITE VALUE OF THE ESTATE BUNGALOW, THE ENTIRE PERQUISITE VALUE HAS TO BE EXCLUDED FROM TAXATION. 3. ON THE CONTRARY, SMT. VIJAYAPRABHA, THE LD.DR SU BMITTED THAT THE NATURE OF WORK CARRIED OUT BY THE ASSESSEE DOES NOT REQUIRE TH E ASSESSEE TO STAY IN THE ESTATE BUNGALOW. THEREFORE, IT CANNOT BE SAID THAT THERE WAS ANY NECESSITY AND COMPULSION TO STAY IN THE ESTATE PREMISES. REFERRI NG TO THE ORDER OF THE ASSESSMENT, THE LD.DR SUBMITTED THAT THE EMPLOYER H AS DEDUCTED TDS ON THE ENTIRE PERQUISITE VALUE OF THE BUNGALOW. THEREFORE , NOW THE ASSESSEE CANNOT CLAIM THAT THE PERQUISITE VALUE CANNOT BE BROUGHT T O TAXATION. THE LD.DR SUBMITTED THAT THERE IS NO PROVISION IN THE INCOME-T AX ACT TO BRING TO TAX ONLY 25% OF THE PERQUISITE VALUE OF THE BUNGALOW FOR TAX ATION AS CLAIMED BY THE ASSESSEE. ACCORDING TO THE LD.DR, THE ENTIRE PERQU ISITE VALUE OF THE BUNGALOW HAS TO BE BROUGHT TO TAXATION OR IT HAS TO BE EXCLUDED ENTIRELY. THERE IS NO QUESTION FOR BRINGING PARTIAL PERQUISITE VALUE FOR TAXATION. 3 ITA NOS.156, 157 & 158/COCH/2010 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAR EFULLY GONE THROUGH THE ORDER OF THE LOWER AUTHORITIES. IT APPEARS FROM THE ORDE R OF THE COMMISSIONER OF INCOME-TAX(A) THAT THE ASSESSEE HAS CLAIMED BEFORE T HE LOWER AUTHORITIES THAT THE ESTATE BUNGALOW WAS USED AS A GUEST HOUSE BY THE EM PLOYER. MOREOVER, THE LOWER AUTHORITIES HAVE NOT DECIDED THE CLAIM OF THE ASSESSEE THAT WHETHER THERE WAS ANY COMPULSION ON THE ASSESSEE TO STAY IN THE E STATE PREMISES FOR THE PURPOSE OF CARRYING OUT ESTATE OPERATION. THE CERT IFICATE PRODUCED BY THE ASSESSEE FROM THE EMPLOYER SHOWS THAT IT WAS NECESS ARY FOR THE ASSESSEE TO STAY IN THE ESTATE BUNGALOW TO SUPERVISE THE ESTATE OPER ATION. HOWEVER, THIS FACTUAL ASPECT HAS NOT BEEN EXAMINED BY THE LOWER AUTHORITI ES DURING THE ASSESSMENT PROCEEDINGS AND THE APPELLATE PROCEEDINGS. THEREFO RE, THIS TRIBUNAL IS OF THE OPINION THAT THE ASSESSING OFFICER HAS TO RE-EXAMINE THE ISSUE WITH REFERENCE TO THE CERTIFICATE ISSUED BY THE EMPLOYER DATED 17-08-20 09 AND FIND OUT WHETHER THERE WAS ANY NECESSITY AND COMPULSION ON THE PART OF THE ASSESSEE TO STAY IN THE ESTATE BUNGALOW IN ORDER TO CARRY OUT HIS ESTATE OP ERATIONS. ADMITTEDLY, THERE IS NO PROVISION IN THE INCOME-TAX ACT TO PARTIAL DISALL OWANCE OF THE PERQUISITE. EITHER THE ENTIRE PERQUISITE VALUE HAS TO BE BROUGH T TO TAXATION OR IT HAS TO BE EXEMPTED. AS RIGHTLY POINTED OUT BY THE LD.DR, THE RE IS NO QUESTION OF BRINGING THE PARTIAL AMOUNT FOR TAXATION. HOWEVER, THIS FAC T HAS TO BE EXAMINED AFTER CONSIDERING THE CLAIM OF THE ASSESSEE THAT THERE WA S A COMPULSION ON THE PART OF THE ASSESSEE TO STAY IN THE ESTATE BUNGALOW FOR THE PURPOSE OF HIS WORK IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF ARUN KUMAR & OTHERS (SUPRA). THIS TRIBUNAL IS OF THE OPINION THAT THE MATTER NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER IN THE LIGHT OF JUDGMENT OF T HE APEX COURT AND THE CERTIFICATE ISSUED BY THE EMPLOYER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF ADDITION OF PERQUISITE VALUE OF THE ACCOMMODATION IS 4 ITA NOS.156, 157 & 158/COCH/2010 REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXAMINE THE ISSUE AFRESH IN THE LIGHT OF JUDGMENT O F THE APEX COURT IN THE CASE OF ARUNKUMAR & OTHERS (SUPRA) AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IT IS MADE CLEAR THAT THE ASSESSING OFFICER SHALL DECIDE THE I SSUE AFRESH WITHOUT BEING INFLUENCED BY ANY OF THE OBSERVATIONS MADE BY THIS TRIBUNAL IN THIS ORDER OR BY THE COMMISSIONER OF INCOME-TAX(A) IN THE IMPUGNED OR DER. 5. WITH THE ABOVE OBSERVATIONS, ALL THE THREE APPEA LS OF THE ASSESSEE ARE ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF FEBRUARY, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 29 TH FEBRUARY, 2012 PK/- COPY TO: 1. P.S. KING, PASUPPARA ESTATE, PASUPPARA PO, KOTTAYAM 2. ITO, WD.2, KOTTAYAM 3. THE C.I.T(A)-IV, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH