SHANTANU R. RANAVADE, PUNE V. ITO 26(2)(2), MUMBAI

ITA 1594/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8865 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 02-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M KHARE
• Assessee Lawyers: Y P PANDIT
• Keywords: Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.1594/MUM/2010 A.Y 2003-04 MR. SHANTANU R. RANAVADE, FLAT NO.B-302, MADHUJEET CHS LTD., PLOT NO.29/49 , SECTOR 21, NERUL, NAVI MUMBAI 400 706 VS. THE INCOME TAX OFFICER, WARD 26 (2) (2), MUMBAI. PAN: AADPR 6061 P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y.P.PANDIT. RESPONDENT BY : SMT. M. KHARE. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOW ING GROUND: 2. (A) THE LD. AO WHILE TREATING THE RENT OF ` `` ` .1,72,065/- PAID BY EMPLOYER OF THE ASSESSEE BPCL TO THE ASSESSEE AS I NCOME FROM HOUSE PROPERTY FAILED TO TAKE INTO ACCOUNT THAT TH E EMPLOYER BPCL HAS ALREADY CALCULATED THE AMOUNT OF ` `` ` .25,760/- AS VALUE OF PERQUISITE OF PROVIDING RENT FREE ACCOMMODATION AS PERQUISITE U/S.17(2) OF THE ACT & ADDED IT AS A PART OF SALARY BY APPLYING THE PROVISION OF RULE 3(1) OF I.T.RULES & DID NOT REDUC E THE SAID VALUE OF PERQUISITE OF ` `` ` .25,760/- FROM THE COMPUTATION OF INCOME AT THE TIME OF RE-ASSESSMENT. THIS RESULTED IN THE DOUBLE TAXATION OF INCOME. (B) IN VIEW OF THE ABOVE FACT, THE LD. AO AS WELL A S CIT[A] OUGHT TO HAVE HELD THERE WAS NO WILLFUL CONCEALMENT OF ANY I NCOME BUT THERE WAS CHANGE OF VIEW BY TAXING INCOME UNDER DIF FERENT HEAD I.E. TAXING INCOME UNDER THE HEAD INCOME FROM HOUS E PROPERTY INSTEAD OF INCOME FROM SALARY AND NO PENALTY SHOU LD HAVE BEEN LEVIED. 2. BEFORE US, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THE IMPUGNED ORDER CIT[A] HAS DISMISSED THE ASSESSEES APPEAL BEING LATE BECAUSE , ACCORDING TO HIM, APPEAL WAS FILED LATE B Y THREE DAYS. HE REFERRED TO PAGE-2 OF THE CIT[A]S ORDER AND POINTE D OUT THAT ASSESSEE 2 HAS RECEIVED THE ORDER ON 30-04-2009 AND, THEREFORE , APPEAL WAS REQUIRED TO BE FILED BEFORE 29-5-2009. BUT 30 TH AND 31 ST OF MAY BEING SATURDAY AND SUNDAY AND BEING CLOSED HOLIDAYS, THER EFORE, APPEAL COULD BE FILED ON 1-6-2009. HE SUBMITTED THAT DELAY WAS ON ACCOUNT OF HOLIDAYS AND ONLY THREE DAYS OF DELAY WAS INVOLVED. THEREFORE, THE DELAY SHOULD BE CONDONED. AS FAR AS MERITS ARE CON CERNED, THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE GROU P OF CASES IN I.T.A.NO.5879/M/2009 & ORS. 3. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER OF THE CIT[A]. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT THERE WAS A DELAY OF 3 DAYS. EVEN AS PER THE ORDER OF THE CIT[A] THE APPEAL SHOULD HAVE BEEN FILED ON 29-5-2009, OUT OF WHICH 30 TH AND 31 ST WERE CLOSED HOLIDAYS AND, THEREFORE, THE ACTUAL DEL AY IS ONLY OF ONE DAY. WE ARE OF THE VIEW THAT THE LD. CIT[A] COULD H AVE TAKEN A LIBERAL APPROACH AND CONDONE THE DELAY OF ONE DAY. THEREFOR E, WE CONDONE THE DELAY AND SET ASIDE THE ORDER OF THE CIT[A] ON THIS ISSUE. 6. AS FAR AS MERITS ARE COVERED, THE ISSUE IS COVER ED BY THE ORDER OF THE TRIBUNAL IN THE GROUP OF CASES IN I.T.A.NO.5 879/M/2009 & ORS. VIDE PARA 12 WHICH IS AS UNDER: 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD. THE LEASING OF FLAT BY THE EMPLOYEE TO T HE CORPORATION IS A SEPARATE TRANSACTION. THE LEASE RENT RECEIVED BY TH E EMPLOYEE IS TAXED SEPARATELY. THE EMPLOYEE DOES NOT LOSE THE BENEFIT OF THE HRA MERELY BECAUSE HE HAS LEASED HIS PREMISES TO THE CORPORATI ON. BY THE VIRTUE OF THE CORPORATION PERMITTING THE EMPLOYEE TO OCCUPY T HE PREMISES IT HAS TAKEN ON LEASE, THE HRA OF THE EMPLOYEE IS WITHHELD IN LIEU OF THE LEASE RENT PAYABLE BY THE EMPLOYEE FOR THE ACCOMMOD ATION PROVIDED BY THE CORPORATION. THEREFORE, IN COMPUTING THE VALUE OF PERQUISITE FOR 3 ACCOMMODATION PROVIDED BY THE CORPORATION, THE HRA WITHHELD SHOULD BE TREATED AS AMOUNT RECOVERED BY THE EMPLOYER FOR PROVIDING ACCOMMODATION AND THE PERQUISITE VALUE BE CALCULATE D ON THE VALUE OVER AND ABOVE THE HRA RECOVERED. IN THESE CIRCUMST ANCES, WE DIRECT THE AO TO REDUCE HRA FROM THE VALUE OF PERQUISITE A ND REWORK THE ASSESSMENT IN ACCORDANCE WITH LAW AND ISSUE THE REF UND DUE ACCORDINGLY. FOLLOWING THE ABOVE ORDER, WE DECIDE THE ISSUE IN F AVOUR OF THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF JANUARY, 2011. SD/- SD/- (N.V.VASUDEVAN) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 21 ST JANUARY, 2011. P/-*