DCIT, New Delhi V. Sh. O.P. Srivastava, Lucknow

ITA 2476/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53244 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 01-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: J J MEHROTRA
• Keywords: Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO.2476/DEL/2011 ASSESSMENT YEAR : 2007-08 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, NEW DELHI. VS. SHRI O.P. SRIVASTAVA, SAHARA BHAWAN, 1, KAPOORTHALA COMPLEX, ALIGANJ, LUCKNOW. PAN : AKHPS7919K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI J.J. MEHROTRA, FCA REVENUE BY : SHRI SALIL MISHRA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRE CTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 14 TH FEBRUARY, 2011 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD . CIT (A) HAS ERRED IN :- 1. THE ORDER OF THE LEARNED CIT (A) IS NOT CORRECT IN L AW AND FACTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.8,59, 127 ON ACCOUNT OF VARIOUS PERQUISITES AND UNEXPLAINED CRE DIT OF BANK ACCOUNT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN ALLOWING THE CLAIM OF RS.4,41,1 90/- U/S 10(13A). ITA NO.2476/DEL/2011 2 THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DEMAND ANY /ALL OF THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF THE H EARING OF THE APPEAL. 2. THE ASSESSEE FILED THE RETURN OF INCOME SHOWING AN IN COME OF ` 1,01,532/- WHICH COMPRISED OF A SUM OF ` 93,22,659/- ON ACCOUNT OF SALARY FROM M/S SAHARA INDIA COMMERCIAL CORPORATION L TD. M/S SAHARA INDIA FINANCIAL CORPORATION LTD. INCLUSIVE OF INCOME FROM OTHER SOURCES OF ` 11,13,263/-. THE ASSESSING OFFICER ADDED THE FOLLO WING AMOUNTS TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF PERQUISITES:- 1. CHAUFFEUR DRIVEN CAR (3,00,000-26,400) RS.2,73,60 0/- 2. RESIDENCE AND FURNITURE RS.48,940/- 3. CREDIT CARD EXPENSES RS.27,539/- 4. DOMESTIC SERVANT RS.2,48,898/- 5. TELEPHONE EXPENSES (20% OF DISALLOWANCE RELATING TO TELEPHONE) RS.33,750/- 6) CASH CREDIT RS.2,00,000/- 3. THE ASSESSING OFFICER ALSO DISALLOWED EXEMPTION U/S 10( 13A) AMOUNTING TO ` 4,41,190/-. 4. AT THE OUTSET, IT WAS SUBMITTED BY THE COUNSEL OF TH E ASSESSEE THAT ALL THESE DISALLOWANCES ARE COVERED BY THE EARLIE R ORDER OF THE TRIBUNAL IN RESPECT OF ASSESSMENT YEARS 2003-04 TO 2006-0 7. HE HAS PRODUCED BEFORE US COPY OF THE SAID ORDER DATED 13 TH MAY, 2011 IN ITA NOS.504, 1609, 1608 & 1610/DEL/2010 AND CO NOS.157/DE L/2011, 156/DEL/2010 & 158/DEL/2010. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDER OF THE ASSESSING OFFICER. THE ISSUE OF PERQUISITES ON ACCOUNT OF DOMESTIC SERVANTS, TELEPHONE AND MOBILE AND FURNITURE, CREDIT CARD AND CHAUFFEUR DRIVEN CAR AND ADDITION MADE IN RESPECT OF CASH CREDIT WERE ITA NO.2476/DEL/2011 3 ALSO CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE AND ALL THESE ADDITIONS WERE DELETED WITH THE FOLLOWING OBSERVATION S:- 11. GROUND NO.4 IN ALL THE APPEALS IS AGAINST DELE TING ADDITION MADE ON ACCOUNT OF PERQUISITES. THE ISSUES A RE COVERED BY THE DECISION OF HONBLE ITAT G BENCH, NEW DELHI IN CASE OF SUBRATA ROY SAHARA IN ITA NO. 4024/DEL/2010 FOR A.Y. 2007-08 DT. 4.11.2010AND ALSO IN THE CASE OF J.B.ROY IN ITA 1569 TO 1571/DEL/10 DT. 31.8.2010 . ON THE EXPENSES OF SER VANTS, TELEPHONE, CELL PHONE AND CHAUFFER DRIVEN CAR THE HON BLE ITAT DECIDED AS IN THE CASE OF SUBRATA ROY SAHARA (CITED SU PRA). ON THE ISSUE OF CONCESSIONAL RENT THE HONBLE ITAT DECIDE D THE ISSUE AS IN THE CASE OF J.B.ROY CITED SUPRA AS UNDER. PARA 6.2 AS REGARDS THE ISSUE OF CONCESSIONAL RENT, LD.COUNSEL OF THE ASSESSEE REFERRED TO THE AFORESAID TRIBUNALS ORDER IN ASSESEES OWN CASE WHEREIN VIDE PARA 6 FOLLOWING HAS BEEN HELD. APROPOS ADDITION ON ACCOUNT OF CONCESSIONAL RENT INCLUDING THE BENEFIT OF FURNITURE AND FIXTURE, ITAT IN A.Y. 1999-2000 HAS HELD THAT THESE PREMISES ARE NOT OWNED BY THE FIRM, THERE IS NO CHANGE IN THE FACTS WHICH IS AGREED BY BOTH PARTIES. FOLLOWING THE ORDER OF ITAT ORDER WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE ADDITIONS ON ACCOUNT OF CONCESSIONAL RENT INCLUDING BENEFITS ARISING OUT OF FURNITURE AND FIXTURE. THIS GROUND OF REVENUE IS DISMISSED. 12. GROUND NO.5 IN ITA 1609/DEL/2010 IS DECIDED AS UNDER. WE HAVE HEARD BOTH THE SIDES. THE ISSUE INVOLVED IN GROUND NO.5 IS REGARDING DELETION OF ADDITION OF RS. 3,00,00 0/- U/S 68 OF THE I.T.ACT. THIS WAS THE AMOUNT DEPOSITED IN THE ASSESS EES BANK ACCOUNT ON 12.1.2005 AT UNION BANK OF INDIA. AF TER HEARING BOTH THE SIDES WE FIND THAT THE ASSESSEE WAS HAVING SUBS TANTIAL CASH WITHDRAWALS PRIOR TO THE DEPOSITS MADE IN THE BANK. IT IS ALSO NOTED THAT AS PER THE WEALTH TAX RETURN THE ASSESSEE WAS ALSO HAVING CASH BALANCE OF RS. 1,50,000/- AT THE BEG INNING OF THE F.Y. I.E. 1.4.2004. THE CASH WITHDRAWAL PRIOR TO THE DEPOSITS WERE OF RS. 20 LAKHS. KEEPING THESE FACTS IN VIEW W E SUSTAIN THE ORDER OF LD.CIT(A) AND DISMISS THE REVENUES GROU ND. ITA NO.2476/DEL/2011 4 6. SO AS IT RELATES TO GROUND NO.2, THIS ISSUE IS ALSO COV ERED IN FAVOUR OF THE ASSESSEE BY THE AFOREMENTIONED ORDER OF T HE TRIBUNAL WHEREIN THE OBSERVATIONS OF THE TRIBUNAL WITH REGARD TO THIS GROUND ARE AS UNDER:- 8. GROUND NO.3 IN ALL THE APPEALS IS COVERED BY THE D ECISION OF HONBLE ITAT IN ITA 1569 TO 1571/DEL/2010 FOR A.Y S 2002-03 TO 2006-07 RESPECTIVELY IN THE CASE OF CIT VS JB ROY V IDE ORDER DT. 31.8.2010 WHEREIN THE HONBLE ITAT IN PARA 5 HAS HELD AS UNDER. ANOTHER COMMON ISSUE IS THAT LD.CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 10(13) OF THE I.T.ACT. ON THE ISSUE LD.COUNSEL OF THE ASSESSEE SUBMITTED THAT THIS ISSUE IS AGAIN COVERED BY THE AFORESAID TRIBUNALS ORDER IN ITA 1646 TO 1648/DEL/2008 DT. 4.6.2009 WHEREIN IN PARA 7 FOLLOWING HAS BEEN HELD. APROPOS REMAINING GROUND I.E. DEDUCTION U/S 10(13A) THERE IS NO CHANGE IN THE FACT FOLLOWING THE ITAT ORDER OF A.Y. 1999-2000 WE HOLD THAT THE CIT(A) HAS RIGHTLY ALLOWED DEDUCTION U/S 13A. THIS GROUND OF REVENUE IS DISMISSED. SINCE THE CIT(A) HAS FOLLOWED THE ABOVE ORDER IN HIS APPELLATE ORDER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND HENCE, CONFIRM THE SAME. 9. THE CIT(A) HAS GRANTED THE RELIEF BY HOLDING AS UNDER. THIS GROUND IS IN RESPECT OF DENIAL OF DEDUCTION CLAIMED BY THE APPELLANT U/S 10(13A) OF THE INCOME TAX ACT IN RESPECT OF HOUSE RENT PAID. IN THE ENTIRE ASSESSMENT ORDER THERE IS NO WHISPER AS TO WHY THE CLAIM OF THE APPELLANT U/S 10(13A) HAS BEEN DISALLOWED BY THE LD.AO AND, THEREFORE, THE APPELLANT HAS ONLY INFERRED THAT SINCE THE LD.AO HAS SUBJECTED SALARY INCOME RECEIVED BY THE APPELLANT TO TAX AS INCOME FROM OTHER SOURCES HE HAS NOT ALLOWED THE CLAIM OF THE APPELLANT IN RESPECT OF HOUSE RENT U/S 10(13A) OF THE I.T.ACT. ITA NO.2476/DEL/2011 5 THE APPELLANT IS PAYING HOUSE RENT FOR HIS RESIDENTIAL ACCOMMODATION OCCUPIED BY HIM BY WAY OF DEDUCTION FROM SALARY INCOME AND HAS CLAIMED DEDUCTION U/S 10(13A) IN RESPECT THERETO. THE LD.AO BECAUSE OF TREATING SALARY INCOME TO BE IN THE NATURE OF INCOME FROM OTHER SOURCES HAS DEEMINGLY DENIED THE CLAIM OF THE APPELLANT, U/S 10(13A). DEDUCTION U/S 10(13A) CLAIMED BY THE APPELLANT IS AS FOLLOWS, THE LEAST OF THE FOLLOWING. A) HRA RS. 4,54,000/- B) RENT PAID IN EXCESS OF 10% OF THE SALARY RS. 4,56,400 /- C) 40% OF SALARY RS. 6,94,400/- EXEMPTION U/S 10(13A) ACCORDINGLY WORKS OUT TO RS. 4,54,000/-. THIS FIGURE STANDS DULY SUPPLIED TO THE DEPARTMENT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND IS ALREADY ON RECORD AND HAS BEEN ACCEPTED BY THE DEPARTMENT. SINCE THE DISALLOWANCE IS OF CONSEQUENTIAL NATURE BECAUSE OF TREATMENT OF SALARY INCOME AS INCOME FROM OTHER SOURCES IT IS PRAYED THAT DEDUCTION U/S 10(13A) OF THE I.T.ACT MAY KINDLY BE ALLOWED TO THE APPELLANT. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND I FIND NO DISCUSSIONS IN THIS RESPECT IN THE ASSESSMENT ORDER. IT APPEARS THAT THIS DEDUCTION HAS NOT BEEN ALLOWED TO THE ASSESSEE CONSEQUENTIALLY TO THE TREATMENT OF HIS INCOME UNDER THE HEAD SALARIES AS INCOME FROM OTHER SOURCES. SINCE I HAVE ALREADY HELD THAT THE INCOME OF THE APPELLANT FROM SALARY SHOULD BE ASSESSED UNDER THE HEAD SALARIES AND NOT INCOME FROM OTHER SOURCES. I DIRECT THE AO TO ALLOW THE DEDUCTION OF RS. 4,54,000/- CLAIMED BY THE APPELLANT U/S 10(13A) AS THE QUANTUM OF THE SAME HAS NOT BEEN DISPUTED. I DIRECT THE AO ACCORDINGLY. 10. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE IT AT ON THE SAME FACTS, WE DISMISS THIS GROUND OF REVENUES APP EAL. ITA NO.2476/DEL/2011 6 7. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOTH THE PARTIES, RESPECTFULLY FOLLOWING THE EARLIER DECISION OF THE TR IBUNAL IN ASSESSEES OWN CASE IN WHICH ONE OF US (JM) IS A PARTY, WE FIND N O MERIT IN THE APPEAL FILED BY THE DEPARTMENT AND THE SAME IS DISMISSED . 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 01.12.20 11. SD/- SD/- [K.D. RANJAN] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 01.12.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES