I.T.O Wd - 52(2),kolkata, Kolkata V. Shri Prasanta Dhar., Kolkata

ITA 2142/KOL/2013

• Counselvise Citation: 214223514 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2013
• Court: TRIBUNAL
• Department Lawyers: SANJAY SR DR
• Assessee Lawyers: T NAG
• Section: 143(3); 133(6); 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: KOLKATA [BEFORE HON BLE SHRI B.P.JAIN, AM] I.T.A NO.2142 /KOL/2013 ASSESSMENT YEAR: 2006 - 07 I.T.O., WARD - 52(2), VS SHRI PRASANTA DHAR KOLKATA KOLKATA (APPELLANT) ( RESPONDENT ) (PAN: ADSPD 8392 D) FOR THE APPELLANT : SHRI SANJAY, SR.DR, ADDL. C.I.T. FOR THE RESPONDENT : SHRI T.NAG, ADVOCATE DATE OF HEARING : 05 .06 .2015. DATE OF PRONOUNCEMENT: 05 .06 .2015. ORDER THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF LD.CI T(A) - XXXIII , KOLKATA DATED 29.05 .2013 FOR ASSESSMENT YEAR 2006 - 07. 2. THE BRIEF FACTS OF THE CASE ARE THAT ADDITION OF RS.14,50,700/ - MADE BY PASSING ORDER UNDER SECTION 154. IN THIS CASE, ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF INCOME TAX ACT, 1961 ON 18.11.2008 . THE ASSESSEE HAD, IN HIS RETURN, SHOWN INTEREST OF R S.10,50,700/ - FROM RBI WHICH WAS CLAIMED AS EXEMPT FROM INCOME TAX. THIS EXEMPTION WAS ALLOWED IN THE SCRUTINY ASSESSMENT. HOWEVER, LATER ON A NOTICE UNDER SECTION 154 WAS ISSUED PROP OSING TO WITHDRAW THE EXEMPTION. ALSO, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ACTUAL AMOUNT OF INTEREST WAS OF RS.14,50,700/ - AND NOT OF RS.10,50,700/ - AS SHOWN IN THE RETURN. VIDE HIS ORDER THE ASSESSING OFFICER MADE ADDITION OF RS.14,50,700/ - TO THE ORIGINALLY ASSESSED INCOME BY TREATING THE AFORESAID INTEREST TO BE TAXABLE. 2.1. THE LD. CIT(A) REDUCED THE AMOUNT OF RS.14,50,700/ - TO RS.10,50,700/ - AND ACCORDINGLY REDUCED THE ADDITION VIDE PARA 5 OF HIS ORDER. ITA NO .2142/KOL/2013 SHRI PRASANTA DHAR A.YR. 2006 - 07 2 3. I HAVE HEARD THE RIVAL CONTENTIO NS AND PERUSED THE FACTS OF THE CASE. FOR THE SAKE O F CONVENIENCE I REPRODUCE HEREWITH THE ORDER OF LD. CIT(A) HEREIN BELOW : 5 . I HAV E CO N SI D E RED THE S U BMISSION MADE . TH E ASSE SSMENT RECO R DS HAVE ALSO BEEN PERUSED BY M E . IT APPEA R S T HA T T HE ENTIRE CONFUSIO N A R OSE FROM T HE I NFORMATION CALLED FO R UNDE R SECTION 133(6) OF IN CO ME TAX ACT , 1961 BY TH E ASSESS IN G OFF I CER FRO M UCO BANK . I N THE COURS E OF ORIGIN A L ASS ESSMEN T PRO CE EDIN G S , T HE ASSESS I NG OFF I CE R HAD I SSUED NOT I CE UNDER SECTION 133(6 ) TO T HE UCO B A NK , KO L KATA MA IN BRANCH CAL LING FOR INFORM A TI O N O N I NVEST M E N T I N B ON DS MAD E BY TH E APPELL A N T AS WELL AS SOME O F T HE MEMBERS OF HI S FAM I LY . AS PER R EPLY OF U CO B A N K , THE APPELLANT HAD M A DE I NVESTMENT OF RS . 3 2 . 5 L ACS D U R I NG F I NA NCI A L YEA R 2 005 - 06 I N T AXABLE BONDS . AFTE R COMPLET I ON OF ASSES S M E NT , TH E A UDIT PARTY OBS E RV ED TH AT AS PE R I NFOR M AT I ON RECE I VED FROM U C O BANK , THE B O ND S PURCH ASED BY TH E AP PE LLA N T WERE T A X A BL E . BASED ON T H I S , AN OBJECT I ON WAS R A I SE D T HAT EX E M P TION O N I NT ERE ST WA S WR O N G LY A LL OWED I N T HE ASSESS M ENT . FURTHER , TH E A UDI T P A R TY S T A TED THAT CO RR ECT AM O UNT OF I NTERES T WAS OF RS . 14 , 50 , 700 1 - , A L THOU GH N O WOR KI NG F O R THE SAM E WAS GI V E N . THE ASSESSING OFFICER IS S UED NOT I CE UNDER SECT I O N 1 54 IN THIS REGA R D AN D , HAVING R E C E I VED NO OB J ECT I O N FROM THE APPELL A NT , PA SSE D O R DE R UND E R SECTION 154 . HOWEV E R , T HE ENT IR E BAS I S OF THE OBJECT I ON I S ER R ONEOUS . THE E XEMPTION OF INTERES T H A D N EVER BE E N C L A IM E D IN R ESPEC T OF T AXAB L E BONDS PURCH A SED DURING THE YEAR . T H E A PPELL ANT HAD , IN TH E EA RLI E R Y EARS , PU R CHASED RBI REL I E F BO ND S WHICH H A D MATU R E D D U RING THE YE A R . O U T O F M A T U RI TY PROCEEDS O F THE SA ME , C E R TA IN SU M H A D B EE N INVESTED IN T A X AB L E BONDS . NO EXEMPTION H AD BEEN CL A IM ED IN R ESPECT OF INTEREST FROM T AXABLE B O N DS , W HI CH , IN ANY CASE , H AD NOT AR I SEN DURIN G TH E Y E AR , AS THIS W A S THE YEAR OF INV ES TMENT . T H E EXEMPTION , THAT TH E A PP E LLANT H A D CL A IMED , WAS I N R E SPECT OF INTER ES T R E C E I VED O N T AX R E LIEF BOND S IN WHICH IN VES TM EN T H A D BE EN MADE IN THE E A RLI E R Y EA R S . F R O M TH E COPY O F THE SAID BONDS IT C A N BE SEE N , THA T THEY WE RE I NDEED IN N AT U RE OF TAX R ELIEF BONDS AND ACCOR D INGLY IN T ER ES T THEREON WAS EXEMPT UNDE R S E CT I ON 1 0 ( 15 )(I IC ) OF INCOME TAX AC T , 1961. THUS , T HE EXE M P TI O N O N IN T EREST FROM TH E SAID BOND HAD BEEN RIGHT L Y C L A IM E D I N R ETU RN AND A LL OWED I N THE SC R U TI N Y AS SE S S M E NT . WHILE I T I S T RUE , THAT THE A PP E LL A N T H AD NOT R AISED A NY OBJECTION TO TH E PR O POSED R ECTIFICATION ( PURPORTEDLY ON AC C O UNT O F BE I NG ILL ADV I SED A T TH A T TIME ) , THAT , I N NO W AY , ALTERS THE FACT , THAT T HE I N T E RE ST F ROM RB I T A X R E LI E F BOND S W AS NOT TAXABL E AT A LL . T HE EXEMPTION ON SUCH I NTE RE S T C A NNOT B E DEN I E D ON TH E T O T A LLY IRRE L EV A N T CONSIDERATION THAT MATURITY P RO C EEDS FROM THE T AX FREE BOND S W E R E S UBSEQUENTLY INVE STED IN TAXABLE BONDS . THE ASSESS IN G OFFICE R C A N TAX A N Y IN COME ST RI CT L Y IN ACCORDAN CE W ITH THE P R OVISIONS OF I . T . ACT AND NOT O TH E R W I SE . IT I S NOT CL EA R F R O M THE IMPUGNED O R DE R , AS TO ON WHAT BAS I S T H E A SSESS IN G OFF I CER H AS IN C R EASED THE AM O U NT OF I N T E R EST FROM RS . 10 , 50 , 70 0/ - - TO RS . 1 4 , 50 , 70 0 / - . IT APP EA R S , TH AT THE SAME IS B ASE D O N THE R E CEIPT & PAYMENT ACCOUNT SUB MITT E D AS A PART O F R E T UR N . HOWEVER , ON CLO S ER EX A MI NAT I ON , I T I S SEEN THAT ONE OF THE FIG UR ES I N THE S A I D ACCOUNT , V I Z . THAT OF RS .6 , 2 1 , 200 / - - IS I NC L USIVE OF PRINC I PAL A MOUN T O F RS 4 , OO , OOO I - . ON EXCLUD I NG T HI S PRINCIP A L A M O UN T , THE CO RR ECT AMOUNT OF I N TERES T I S OF R S . 10 , 50 , 700 1 - O N LY . CONSIDE R ING T HIS , T HE ASSESSING OFF I CE R I S DIRECTED T O R E DU CE THE A M O UNT OF TO RS . 10 , 50 , 700 / - A ND ALSO TO A L LOW EXEMPTION ON THE SAID I N T E R EST AND REDUCE I NCO M E ACCORD I NGLY . ITA NO .2142/KOL/2013 SHRI PRASANTA DHAR A.YR. 2006 - 07 3 3.1. THE AGITATION BY THE REVENUE WAS MAINLY BECAUSE THE LD.CIT(A) HAS PROCEEDED BY CONTRAVENING RULE 46A OF IT RULES 196 1 AND WITHOUT REBUTTING THE MATTER TO THE AO. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE , THE LD.CIT(A) COULD NOT PROCEED TO DECIDE THE ISSUE AND REDUCE THE ADDITION AGAINST THE REVENUE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE , THE MATTER IS SET ASIDE TO THE FILE OF AO, WHO WILL EXAMINE THE ISSUE AND DECIDE THE SAME DE NOVO BUT BY AFFORDING ADEQUATE OPPORTUNITY OF BEING HE ARD TO BOTH THE PARTIES AND FOLLOWING THE RULE 46A OF I.T.RULES, 1962. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDE R PRONOUNCED IN THE OPEN COURT ON 05 .06 .2015. SD/ - [ B.P.JAIN ] ACCOUNTANT MEMBER DATE: 05 .06 .2015. R.G.(.P.S.) C OPY OF THE ORDER FORWARDED TO: 1 . SHRI PRASANTA DHAR, 4, SARAT GHOSH GARDEN ROAD, KOLKATA 700031. 2 I.T.O., WARD - 52(2 ), KOLKATA 3 . CIT(A) - X XXIII , KOLKATA 4. CIT - KO LKATA. 5. CIT - DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES