Smt. Alpaben Divyeshkumar Shah, Anand V. The Income tax Officer,Ward-3, Anand

ITA 1792/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1308 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: S N DIRETIA

Judgement Text

ITA NO . 1792 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND KUL BHARAT JM] ITA NO. 1792 / AHD / 2 0 1 2 ASSESSMENT YEAR: 20 0 8 - 09 ALPABEN DIVYESHKUMAR SHAH ....... .. . ..... APPELLANT 5, LAXSHADEEP SOCIETY, NEAR PART H BUNG A LOW, V.V. NAGAR KARAMSAD ROAD, ANAND. [PAN BNQPS 6899 K ] VS. INCOME TAX OFFICER, .... .................. .... .. RESPONDENT WARD 3 , ANAND . APPEARANCES BY: S.N. DIRETIA FOR THE APPELLANT NARENDRA SINGH FOR THE RESPONDENT DATE OF CONCLUDI NG THE HEARING : AUGUST 4 TH , 201 5 DATE OF PRONOUNCING THE ORDER : OCTOBER 27 TH , 2015 O R D E R PER PRAMOD KUMAR AM: 1. TH E SHORT QUESTION THAT WE ARE REQUIRED TO ADJUDICATE IN THIS APPEAL IS WHETHER OR NOT THE LD . CIT ( A ) WAS JUSTIFIED IN UPHOLDING THE IMPUGNED ADDITION OF RS. 2,87,860/ - IN RESPECT OF INTEREST ON COMPENSATION RECEIVED BY THE ASSESSEE ON HER HUSBAND S DEATH, AND IN DECLINING ASSESSEE S PLEA THAT IT SHOULD BE TAXED IN THE YEARS TO WHICH IT PERTAINS. THE ASSESSMENT YEAR BEFORE US IS 2008 - 0 9 AND THE IMPUGNED ORDER WAS PASSED BY THE LD . CIT(A) ON 25 TH MAY, 2012. ITA NO . 1792 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 2 OF 3 2. THE ASSESSEE BEFORE US IS AN INDIVIDUAL. DURING THE RELEVANT PREVIOUS YEAR, SHE RECEIVED A N AMOUNT OF RS.2,87,860/ - BEING HER SHARE OF INTEREST ON COMPENSATION ON ACCOUNT OF HER HUSBAND S DEATH. THE ASSESSING OFFICER HELD THAT ENTIRE AMOUNT IS TO BE TAXED IN THE YEAR OF RECEIPT AND N O T IN THE YEAR IN WHICH IT ACCRUED. THE YEAR WISE DETAILS OF ACCRUAL ARE AS FOLLOWS: - 04.10.2002 TO 31.03.2003 RS.28218.00 04.10.2003 TO 31.03.2004 RS.57540.00 04.10.2004 TO 31.03.2005 RS.57540.00 04.10.2005 TO 31.03.2006 RS.57540.00 04.10.2006 TO 31.03.2007 RS.57540.00 0 1.04 .2007 TO 05.10 .2007 RS.29482.00 3. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT ( A ) BUT WITHOUT ANY SUCCESS. HE HELD THAT IT COULD BE TAXE D ON ACCRUAL BASIS ONLY WHEN ASSESSEE WAS FOLLOWING MERCANTILE METHOD OF ACCOUNTING , BUT THAT IS NOT THE CASE HERE . THE ASSESSEE IS NOT SATISFIED A ND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTE NTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 5. WE FIND THAT IT IS ONLY WITH EFFECT FROM 1 ST APRIL, 2010 THAT DEHORS THE METHOD OF ACCOUNTING EMPLOYED BY THE ASSESSEE, THE INCOME B Y W A Y OF INTEREST ON COMPENSATION IS TO BE TAXED ON CASH BASIS. WHILE IT IS TRUE THAT ASSESSEE WA S NOT MAINTAINING ANY BOOKS OF ITA NO . 1792 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 3 OF 3 ACCOUNT BUT THAT DOES NOT OBLITERATE THE FACT THAT INTEREST PERTAINED TO THE EARLIER YEARS. IN SUCH A SITUATION, A S LONG AS AS SESSEE CAN DEMONSTRATE THAT SHE DID NOT HAVE ANY T AXABLE INCOME, EVEN AFTER TAKING INTO ACCOUNT INTEREST AMOUNT R ELATABLE TO THAT YEAR, THE SAME CANNOT BE BROUGHT TO TAX IN THIS ASSESSMENT Y E AR. WHEN AN AMOUNT IS NOT TAXABLE IN THE YEAR OF ACCRUAL, IT CAN NOT BE BROUGHT TO TAX IN THE YEAR OF RECEIPT JUST BECAUSE IT IS TA XA BLE IN THE YEAR OF RECEIPT. TO THIS EXTENT, WE UPHOLD THE PLEA OF THE ASSESSEE. 6. FOR THE REASONS SE T OUT ABOVE, WE DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE TAXABLE INCOME OF THE A SSESSEE IN THE LIGHT OF THE ABOVE DIRECTIONS. THE ASSESSEE GETS RELIEF, IF ADMISSIBLE, ON THIS BASIS. 7 . IN THE RESULT, THE APPEAL IS ALLOWED TO THE EXTENT AND IN THE TERMS INDICATED ABOVE. P RONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF OCTOBE R , 2015. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 27 TH DAY OF OCTOBER , 201 5 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD