Shri Satyanarayan Patel, Indore V. The ITO Wd-2(3), Indore

ITA 226/IND/2011

• Counselvise Citation: 22622714 RSA 2011
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 07-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: SANDEEP GARG

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM & SHRI R.C. SHARMA, AM ITA NO. 226/IND/2011 A.Y. 2003-04 SATYANARAYAN PATEL, INDORE PAN ACHPP 2408 C . APPELLANT VS. ITO-2(3), INDORE . RESPONDENT APPELLANT BY : SANDEEP GARG, CA RESPONDENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 27.12.2011 DATE OF PRONOUNCEMENT : 21.02.2012 ORDER PER R.C. SHARMA, AM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -II, INDORE, DATED 29.7.2011 FOR THE AY 2003-04 ON THE GROUND TH AT THE LD. CIT(A) ERRED IN MAINTAINING THE TREATMENT OF ALLOWA NCES 2 RECEIVED BY MLA AND EXPENDED FULLY, AS INCOME OF TH E APPELLANT TO THE EXTENT OF RS.2,76,000/-. 2. AT THE OUTSET OF HEARING, THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE ONLY ISSUE INVOLVED IN THE PRESE NT APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I TAT, INDORE PASSED IN THE CASE OF SAME ASSESSEE FOR THE PREVIOU S A.Y. 2002- 03 (ITA NO.225/IND/2011, ORDER DATED 27.10.2011). O N THE OTHER HAND, LD. SR. DR RELIED ON THE ORDER OF THE R EVENUE AUTHORITIES BUT COULD NOT CONTROVERT THE ASSERTION MADE BY THE LD. COUNSEL FOR THE ASSESSEE BY BRINING ANY POSITIV E MATERIAL ON RECORD. BOTH THE PARTIES SUBMITTED THAT THE FACTS O F THE INSTANT CASE ARE EXACTLY SIMILAR TO THE FACTS DISCUSSED BY TRIBUNAL IN ITS ORDER DATED 27.10.2011 (SUPRA). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D AND FIND THAT FOLLOWING THE REASONS GIVEN IN THE ORDER FOR A .Y. 2002-03, THE LD. CIT(A) UPHELD THE ADDITION OF RS.2,76,000/- FOR A.Y. 2003-04 UNDER CONSIDERATION. THE FACTS OF THE INSTA NT CASE ARE 3 EXACTLY SIMILAR TO THE FACTS DISCUSSED BY ITAT, IND ORE IN ITS ORDER DATED 27.10.2011 (SUPRA) FOR A.Y. 2002-03, TH EREFORE, THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDE R FOR READY REFERENCE: THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE, DATED 29.7.2011 FOR THE AY 2002-03 ON THE GROUND THAT THE LD. CIT(A) ERRED IN MAINTAINING THE TREATMENT OF ALLOWANCES RECEIVED BY MLA AND EXPENDED FULLY, AS INCOME THE APPELLANT TO THE EXTENT OF RS.1,86,000/-. 2. THE ASSESSEE HAS FILED WRITTEN SUBMISSION WHICH IS PLACED ON RECORD. AFTER GOING THROUGH THE WRITTEN SUBMISSION AND CONTENTION OF THE LD. SR. DR, I FOUND THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN CASE OF JASWANT SINGH VS. ITO (2005) 96 TTJ (IND) 660 WHEREIN FOLLOWING WAS OBSERVATION OF BENCH: INCOME FROM OTHER SOURCES-DEDUCTION U/S 57(III)-TRAVELLING, CONVEYANCE AND TELEPHONE EXPENSES INCURRED BY MLA- SALARY AND ALLOWANCES OF AN MLA ARE ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES-ASSESSEE, AN MLA OF MADHYA PRADESH LEGISLATIVE ASSEMBLY, WAS ENTITLED FOR DEDUCTION OF TRAVELLING, CONVEYANCE AND TELEPHONE EXPENSES FROM HIS SALARY AND ALLOWANCES TO THE EXTENT OF AMOUNT SPECIFIED IN THE CERTIFICATE ISSUED BY DY. SECRETARY, M.P. 4 LEGISLATIVE ASSEMBLY, AND NOT THE ENTIRE AMOUNT. CONCLUSION : ASSESSEE, AN MLA OF MADHYA PRADESH LEGISLATIVE ASSEMBLY, WAS ENTITLED FOR DEDUCTION OF TRAVELLING, CONVEYANCE AND TELEPHONE EXPENSES FROM HIS SALARY AND ALLOWANCE TO THE EXTENT OF AMOUNT SPECIFIED IN THE CERTIFICATE, ISSUED BY DY. SECRETARY, M.P. LEGISLATIVE ASSEMBLY, AND NOT THE ENTIRE AMOUNT. 3. THE FACTS OF THE INSTANT CASE ARE EXACTLY SIMILAR TO THE FACTS DISCUSSED BY TRIBUNAL IN ITS ORDER (SUPRA). THE ASSESSEE IS AN MLA OF M.P. LEGISLATIVE ASSEMBLY, WHO WAS IN RECEIPT OF SALARY AND VARIOUS ALLOWANCES TO BE ASSESSED IN HIS HANDS UNDER THE HEAD INCOME FROM OTHER SOURCES U/S 56. THE AMOUNT SO RECEIVED HAD BEEN SPENT BY HIM WHILE PERFORMING HIS DUTIES AS MLA. I HAD ALSO VERIFIED THE BANK STATEMENTS PLACED ON RECORD AND FOUND THAT ASSESSEE HAD INCURRED THE ALLOWANCES SO RECEIVED BY HIM. IN VIEW OF THE DECISION OF COORDINATE BENCH, THE ASSESSEE IS ENTITLED FOR DEDUCTION OF THE AMOUNT SPENT BY HIM, IN TERMS OF CERTIFICATE DATED 10.8.2006 PLACED ON RECORD. KEEPING IN VIEW THE ASPECT OF VERIFIABILITY OF EXPENSES IN TERMS OF VOUCHERS, I DIRECT THE AO TO DISALLOW 10% OF SUCH EXPENSES. RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH (SUPRA), I DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF 90% OF DEDUCTION OF RS.1,86,000/- U/S 57(III) OF THE I.T. ACT. I DIRECT ACCORDINGLY. 5 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS INDICATED HEREINABOVE. 4. IN VIEW OF THE ABOVE, SINCE THE FACTS OF THE INS TANT CASE ARE EXACTLY TO THE FACTS DISCUSSED BY ITAT, INDORE IN I TS ORDER DATED 27.10.2011 (SUPRA), WE DIRECT THE AO TO ALLOW THE C LAIM OF 90% OF DEDUCTION OF RS.2,76,000/- U/S 57(III) OF THE I. T. ACT. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN TERMS INDICATED HEREINABOVE. ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESE NCE OF LD. REPRESENTATIVES OF BOTH THE PARTIES AT THE CONCLUSI ON OF THE HEARING. SD/- SD/- (JOGINDER SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21.2.2012 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR