ITO, UDAIPUR V. Shri Ashok Kumar Shah, UDAIPUR

ITA 221/JODH/2014

• Counselvise Citation: 22123314 RSA 2014
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-09-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 10-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Assessee Lawyers: SURESH GANG
• Keywords: Depreciation
• Section: 143(3); 147

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) I.T.A. NO. 221 /JODH/201 4 (A.Y. 200 3 - 0 4 ) ITO, WARD - 1(1), VS SHRI ASHOK KUMAR SHAH, UDAIPUR. C/O. M/S. J.S. BABEL & CO. 9 - BAPU BAZAR, SURAJPOLE, UDAIPUR. PAN NO. AEGPS8640L C.O. NO. 22/JODH/2014 (ARISING OUT OF ITA NO. 221/JODH/2014) (A.Y. 2003 - 04) SHRI ASHOK KUMAR SHAH, VS ITO, WARD - 1(1), C/O. J.S. BABEL & CO., UDAIPUR. 328 - 331, EM ERALD TOWER, HATHIPOLE, UDAIPUR. PAN NO. AEGPS8640L (APPELLANT) (RESPONDENT) ASSESSEE BY : - SHRI SURESH GANG. DEPARTMENT BY : - SHRI JAI SINGH - D.R. DATE OF HEARING : 29 /0 9 /201 4 DATE OF PRONOUNCEMENT : / 0 9 /2014 2 O R D E R P E R HARI OM MARATHA, J.M. : THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION (C.O.) BY THE ASSESSEE FOR A.Y. 2003 - 04 ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 29.01.2014. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE, A S INDIVIDUAL, FILED HIS RETURN OF INCOME (ROI) FOR A.Y. 2003 - 04 ON 11.11.2003 DECLARING TOTAL INCOME OF RS. 5,60,261/ - . AS AGAINST WHICH THE ASSESSMENT ORDER WAS MADE ON 23.12.2005 AT A TOTAL INCOME OF RS. 28,05,054/. IN DOING SO THE A.O. HAS MADE THE FOLL OWING ADDITIONS : - TOTAL INCOME AS PER RETURN OF INCOME RS. 5,60,261/ - ADD ON ACCOUNT OF COMPENSATION RECEIVED. RS. 21,41,737/ - FROM UN, AS DISCUSSED ABOVE. ON ACCOUNT OF DEPRECIATION CLAIMED RS. 52,056/ - DISALLOWED AS DISCUSSED ABOVE. ON ACCOU NT OF COMMISSION PAID RS. 25,000/ - ON ACCOUNT OF LOW HOUSEHOLD RS. 24,000/ - WITHDRAWALS. ON ACCOUNT OF DONATION NOT ADDED RS. 2,000/ - BACK. TOTAL RS. 22,44,793/ - RS. 28,05,054/ - 2.1 AGGRIEVED, THE ASSESSEE FILED APPEAL AND THE LD. CIT (A) HAS DELETED ADDITION OF RS. 21,66,737/ - AND OF RS. 25,000/ - . THE REVENUE IS AGGRIEVED AGAINST THE ABOVE DELETIONS. THE C.O. HAS NOT BEEN PRESSED BY THE LD. A.R. DURING THE HEARING OF THIS APPEAL. 3 2.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREF ULLY PERUSED THE ENTIRE RECORD. THE FACTS APROPOS THE FIRST GROUND OF THE REVENUES APPEAL RELATING TO THE DELETION OF AN ADDITION OF RS. 21,66,737/ - ARE THAT THE ASSESSEE HAD BEEN LIVING IN KUWAIT AND IS AN NON - RESIDENT INDIAN (NRI). THERE WAS A GULF WAR IN WHICH ALL HIS BELONGS GOT DESTROYED. THEREFORE, HE CAME BACK TO INDIA AND APPLIED FOR AND GOT COMPENSATION UNDER THE AEGIS OF THE UNITED NATIONS COMPENSATION COMMISSION AGAINST THE LOSS SUFFERED BY THE ASSESSEE IN THIS WAR. THE DETAILS OF THIS COMPENSAT ION RECEIVED IS AS UNDER: - PERSONAL PROPERTY 1,50,000/ - KUWAIT DINAR INDIVIDUAL BUSINESS LOSS 0,13,000/ - - DO - VALUE OF EMPTY RENTED SHOP 0,13,000/ - - DO - TOTAL 1,75,000/ - - DO - THE VALUE OF THIS COMPENSATION IN INDIA CURRENCY COMES TO RS. 1,63,11,78 2 / - ($ 343216.30 ). THE ASSESSEE HAS CLAIMED THE ENTIRE COMPENSATION AS EXEMPT FROM TAX UNDER THE INCOME TAX ACT. BY RELYING ON THE OFFICE MEMO OF THE CBDT DATED 23.02.1995. AS PER THIS MEMO A DISTINCTION IN THE COMPENSATION QUA THE LOSS/DA MAGE OF BUSINESS ASSETS AND NON BUSINESS ASSETS HAS BEEN SPECIFIED. THE A.O. WANTED THE ASSESSEE TO EXPLAIN THE SAME FAILING WHICH THE A.O. HAS APPORTIONED THE COMPENSATION BETWEEN BUSINESS AND NON BUSINESS BY TREATING 85.73% THEREOF RELATING TO PERSONAL E FFECTS AND THE REMAINING 7.42% HAS BEEN TREATED AS AGAINST BUSINESS ASSETS WHICH HE HAS TAXED. LIKEWISE 6.85% OF THE COMPENSATION HAS BEEN TREATED AND TAXED AS A CAPITAL GAIN. THUS, A TOTAL ADDITION OF RS. 21,41,737/ - HAS BEEN MADE. 4 2.3 IN APPEAL, BEFORE LD. CIT(A), THE ASSESSEE EXPLAINED THAT THE ENTIRE COMPENSATION HAS GIVEN ON ACCOUNT OF LOSS OF PERSONAL HOUSEHOLD EFFECTS AND NON BUSINESS ASSETS, AND THEREFORE, NO PART OF THIS CASE CAN BE TAXED AS PER THE ABOVE NOTED MEMO OF CBDT. REGARDING CAPITAL GAI NS IT WAS STATED THAT NO NON ARABIAN PERSON IS ENTITLED OR ALLOWED TO OWN ANY PROPERTY IN THE GULF THEREFORE, NO CAPITAL GAIN CAN ARISE IN THIS CASE QUA THE COMPENSATION RECEIVED AGAINST THE EMPTY SHOP. 2.4 WE MAY MENTION THAT THE ASSESSMENT ORDER WAS MA DE IN THIS CASE US/ 143(3) R.W.S. 148 OF THE ACT. THIS IS NOT ACTUALLY A CASE FALLING U/S 147 AS THE ASSESSEE HAD FILED HIS ROI BUT IT WAS DEFECTIVE IN AS MUCH AS THAT IT WAS NOT PROPERLY SIGNED BY THE ASSESSEE. IN FACT THIS MATTER HAD TRAVELED UPON APPELL ATE TRIBUNAL IN THE FIRST ROUND WHO REMITTED THE MATTER WITH CERTAIN DIRECTIONS. 2.5 WE HAVE FOUND IT FOR A FACT THAT THE ISSUE INVOLVED IN THIS CASE OF TAXING THE IMPUGNED COMPENSATION IS COVERED BY THE EXEMPTION GRANTED BY THE CBDT CIRCULAR (SUPRA). TH E ASSESSEE DID NOT AND COULD NO T OWN ANY ASSET OR PROPERTY IN KUWAIT AS PER THE LOCAL LAWS PREVAILING IN THAT COUNTRY WHERE NO FOREIGNER IS ENTITLED TO OWN BY PURCHASING ANY PROPERTY /ASSET. BEFORE US THIS FACT COULD NOT BE SUCCESSFULLY CONTROVERTED. THERE FORE, IN THE GIVEN FACTS AND THE CIRCUMSTANCES OF THE CASE, WE DONT FIND ANY INFI RM ITY IN THE VIEW TAKEN BY LD. CIT(A). WE CONFIRM THE SAME AND APPROVE THE DELETION OF THE ADDITION OF RS. 21,41,737/ - AND DISMISS GROUND NO. (1) OF THE REVENUES APPEAL. 3 . THE FACTS APROPOS GROUND NO. (2) ARE THAT THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS. 4,02,381/ - DURING THE RELEVANT F.Y. UNDER 5 THE HEAD COMMISSION PAID ON ACCOUNT OF BOOKINGS DONE BY AGENTS. THE ASSESSEE HAS ALSO SHOWN RECEIPT OF SIMILAR COMMISSION ON BOOKINGS DON E BY HIM. THE A.O. HAS ALSO ACCEPTED THIS FACTUM IN PRINCIPLE AND HAS MADE A LUMP - SUM DISALLOWANCE OF RS. 25,000/ - WHICH HAS BEEN DELETED BY LD. CIT(A) BY HOLDING THE ADDITION AS BASELESS. 3.1 BEFORE US SELF SAME ARGUMENTS WERE ADVANCED BY T HE PARTIES. KEEPING IN VIEW THE PECULIAR CIRCUMSTANCES OF THIS CASE, WE ENDORSE THE VIEW TAKEN BY THE LD. CIT(A) AND CONFIRM T HE IMPUGNED DELETION BY HOLDING IT BASELESS AND THUS, UNJUSTIFIED. THUS, GROUND NO. (2) OF REVENUES APPEAL IS DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION (C.O.) OF THE ASSESSEE, BOTH, STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH SEPTEMBER , 2014 AN / - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR