Shri Sureshchandra Ramanlal Shah, Ahmedabad V. The Income tax Officer,Ward-10(4), Ahmedabad

ITA 2709/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0507 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-03-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 03-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: B T THAKKAR
• Section: 28

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.2709/AHD/2012 ( / ASSESSMENT YEAR : 2009-10) SHRI SURESHCHANDRA RAMANLAL SHAH 15, KALYAN SOCIETY NR.NAGRI HOSPITAL ELLISBRIDGE AHMEDABAD 380 006 / VS. THE INCOME TAX OFFICER WARD-10(4) AHMEDABAD ./ ./ PAN/GIR NO. : AHHPS 5594 B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI B.T. THAKKAR / RESPONDENT BY : SHRI Y.P.VERMA, SR.D.R. / DATE OF HEARING : 07/03/2013 !'# / DATE OF PRONOUNCEMENT : 15/3/2013 $% / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF LD.CIT(A)-XVI, AHMEDABAD DATED 29/10/2012 PASSED FOR ASST.YEAR 2009-10. 2. THE FACTS AS CULLED OUT FROM THE ORDERS ARE AS UNDER:- 2.1. THE ASSESSEE IS AN INDIVIDUAL WHO HAS INCOME F ROM PENSION INCOME FROM PARTNERSHIP-FIRM AND INTEREST INCOME. ASSESSEE FILED HIS ITA NO.2709/AHD /2012 SHRI SURESHCHANDRA RAMANLAL SHAH VS. ITO ASST.YEAR - 2009-10 - 2 - RETURN OF INCOME FOR AY 2009-10 ON 30/07/2009 DECLA RING TOTAL INCOME OF RS.9,38,672/-. THE CASE WAS SELECTED FOR SCRUT INY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S.143(3) OF THE IT ACT, 196 1 VIDE ORDER DATED 23/08/2011 AND THE INCOME WAS DETERMINED AT RS.14,3 1,427/-. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE CARR IED THE MATTER BEFORE CIT(A). CIT(A) VIDE ITS ORDER DATED 29/10/2012, D ISMISSED THE APPEAL OF THE ASSESSEE. AGAINST THE AFORESAID ORDER OF TH E CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING EF FECTIVE GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF RS.4 ,90,000/- BEING CONTRIBUTIONS MADE BY THE APPELLANT TO VARIOU S APPROVED INSTITUTIONS IN SPITE OF THE FACT THAT NEC ESSARY CERTIFICATES HAVE BEEN FILED. 1.1. THE LEARNED CIT(APPEALS) ERRED IN LAW ON FACTS IN REJECTING ALTERNATIVE CLAIM OF DEDUCTION U/S.80GGA ON THE GROUND THAT THE APPELLANT HAS NOT MADE THE CLAI M OF DEDUCTION IN THE RETURN OF INCOME. 2. THE LEARNED CIT(A) ERRED IN LAW AND FACTS IN CONFIR MING ADDITION OF RS.2,755/- BEING ALLEGED VARIATION IN R EALIZATION PROCEEDS OF MUTUAL FUNDS BEING WHICH IS CLAIMED EXE MPT UNDER THE HEAD LONG TERM CAPITAL GAIN. 3. APROPOS TO GROUND NO.1 & 1.1, THE BRIEF FACTS AR E THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED T HAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S.35AC AGGREGATING TO RS.4,90,0 00/-, AGAINST THE INCOME FROM BUSINESS OR PROFESSION AND THUS CLAIMED LOSS UNDER IT. THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS NOT HAVIN G ANY INCOME FROM BUSINESS OR PROFESSION SINCE THE INCOME RECEIVED FR OM THE PARTNERSHIP- FIRM WAS EXEMPT U/S.10(2A), THE ASSESSEE WAS NOT EL IGIBLE FOR DEDUCTION ITA NO.2709/AHD /2012 SHRI SURESHCHANDRA RAMANLAL SHAH VS. ITO ASST.YEAR - 2009-10 - 3 - U/S.35AC OF THE ACT. AO ALSO NOTED THAT ASSESSEE H AD DISCLOSED NIL INCOME AS REMUNERATION & INTEREST ON CAPITAL FR OM THE FIRM WHICH PROVED THAT ASSESSEE DID NOT HAVE ANY INCOME WHICH COULD BE CLASSIFIED AS INCOME FROM BUSINESS & PROFESSION. HE ACCORD INGLY DISALLOWED THE DEDUCTION CLAIMED U/S.35AC OF THE ACT. AGGRIEVED B Y THE ORDER OF AO, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). BEFORE CIT(A), THE ASSESSEE INTER-ALIA SUBMITTED THAT THE DEDUCTION BE ALLOWED U/S.35AC O R IN THE ALTERNATE THE ASSESSEE BE ALLOWED DEDUCTION U/S.80GGA FOR THE REASON THAT THE CONTRIBUTIONS HAVE BEEN MADE TO THE APPROVED INSTITUTIONS AS NOTIFIED U/S.35AC. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THE CLAIM OF THE ASSESSEE B Y HOLDING AS UNDER:- 2.5. I HAVE CAREFULLY CONSIDERED THE FACTS OF TH E CASE AND THE SUBMISSIONS MADE BY THE APPELLANT. AS FAR AS THE I SSUE OF ALLOWANCE OF DEDUCTION U/S.35AC IS CONCERNED, IT IS SEEN THAT THE A.O. HAS CORRECTLY APPLIED THE CONTEMPORARY PROVISI ONS OF STATUTE GOVERNING THE MATTER SECTION 10(2A) OF THE ACT CLEA RLY PRESCRIBES THAT SHARE INCOME FROM PARTNERSHIP FIRM IS NOT AN INCOME FOR INCLUSION IN TOTAL TAXABLE INCOME OF AN ASSESSEE. SECTION 29 PRESCRIBES THAT INCOME UNDER THE HEAD BUSINESS OR P ROFESSION SHALL BE COMPUTED AS PER PROVISIONS OF SECTION 30 TO 43D. SECTION 35AC PRESCRIBES THAT AN ASSESSEE IS ELIGIBLE FOR DEDUCTI ON U/S.35AC FROM HIS INCOME IN RESPECT OF AMOUNTS PAID TO PUBLIC S ECTOR COMPANIES ETC. AS PER CONDITIONS CONTAINED THEREIN. NOW ONCE THE SHARE PROFIT FROM A PARTNERSHIP FIRM IS NOT A PART OF INCOME PER SE, IT DO NOT FALLS UNDER THE PROVISIONS OF SECTION 28 AND WOULD NOT BE AVAILABLE FOR ANY ADJUSTMENTS U/S.35AC. THE ARGUME NT OF THE APPELLANT THAT THE LD.A.O. OUGHT TO HAVE ALTERNATIV ELY ALLOWED THE DEDUCTION U/S.80GGA HAS BEEN CONSIDERED. IT IS SEE N, FROM THE PERUSAL OF COMPUTATION OF INCOME FILED, THAT THE AP PELLANT HAS NOT MADE ANY CLAIM OF DEDUCTION U/S.80GGA IN ITS RETURN OF INCOME. AS PER THE SCHEME OF THE ACT, AN ASSESSEE IS ENTITL ED FOR ALLOWABILITY OF DEDUCTION IN RESPECT OF WHICH CLAIM HAS BEEN MADE ITA NO.2709/AHD /2012 SHRI SURESHCHANDRA RAMANLAL SHAH VS. ITO ASST.YEAR - 2009-10 - 4 - IN THE RETURN OF INCOME FILED. IN THE INSTANT CASE , SINCE NO CLAIM WAS MADE BY THE APPELLANT IN THE RETURN OF INCOME, THE SAME CANNOT BE ALLOWED NOW. THE ARGUMENT OF THE APPELLA NT, CONTAINED IN SUBMISSIONS EXTRACTED SUPRA, THAT APPELLANT BE A LLOWED DEDUCTION OF RS.35,000/- U/S.35(1)(II) AND RS.5,000 /- U/S.80G(2)(A)(IIIHF) HAS BEEN CONSIDERED. PERUSAL OF THE GROUNDS OF APPEAL INDICATE THAT NO SUCH RELIEF HAS BEEN RAI SED THROUGH ANY GROUND OF APPEAL AND ACCORDINGLY THE PRAYER MADE IN THE SUBMISSION IS IGNORED. IT IS ACCORDINGLY HELD THAT THE DISALLOWANCE MADE BY THE A.O. OF RS.4,90,000/- IS BASED UPON THE CORRECT INTERPRETATION OF CONTEMPORARY STATUTE AND DESERVE TO BE CONFIRMED. THE DISALLOWANCE MADE BY THE A.O. IS TH EREFORE CONFIRMED AND THE GROUND OF APPEAL RAISED DISMISSED . 4. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE I S NOW IN APPEAL BEFORE US. BEFORE US, THE LD.AR OF THE ASSESSEE M R.B.T.THAKKAR HAS SUBMITTED THAT THE ASSESSEE DERIVES INCOME UNDER TH E HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION ON ACCOUNT OF INCO ME FROM PARTNERSHIP- FIRM AND HAD ACCORDINGLY MADE A CLAIM U/S.35AC OF THE ACT FOR AGGREGATE AMOUNT OF RS.4,90,000/-. HE FURTHER SUBM ITTED THAT THE INSTITUTIONS TO WHOM THE CONTRIBUTIONS HAVE BEEN MA DE AS PER CLAUSE (A) OF SUB-SECTION 2 OF THE SECTION 35AC AND AS SUCH TH E INSTITUTIONS FULFILL THE CONDITIONS UNDER THE PROVISIONS OF THE ACT. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD MADE AN ALTERNATE CLAIM BEFORE THE CIT(A) FOR DEDUCTIONS U/S.80GGA OF THE ACT. THE CIT(A) DID NO T ALLOW THE CLAIM OF DEDUCTION FOR THE REASON THAT THE ASSESSEE HAD NOT CLAIMED THE DEDUCTION IN HIS RETURN OF INCOME. HE FURTHER SUBMITTED THAT THE CIT(A) HAS ERRED IN DISALLOWING THE CLAIM OF DEDUCTION U/S.80GGA IN VIEW OF THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF NATIONAL P OWER CO.LTD. VS. CIT (1999) 229 ITR 389 (SC). HE THEREFORE SUBMITTED TH AT THE ASSESSEES ITA NO.2709/AHD /2012 SHRI SURESHCHANDRA RAMANLAL SHAH VS. ITO ASST.YEAR - 2009-10 - 5 - CLAIM OF DEDUCTION U/S.35AC BE ALLOWED AS HE HAS INCOME UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION AND IN THE ALTERNATIVE THE CLAIM OF DEDUCTION BE ALLOWED U/S.80GGA OF THE IT ACT. 4.1. ON THE OTHER HAND, LD.SR.DR MR.Y.P.VERMA SU BMITTED THAT SECTION 35AC PRESCRIBES THAT THE ASSESSEE IS ELIGIBLE FOR D EDUCTION FROM HIS INCOME IN RESPECT OF AMOUNTS PAID AS PER THE CONDIT IONS CONTAINED THEREIN. HE FURTHER SUBMITTED THAT THE SHARE OF PR OFIT RECEIVED BY AN ASSESSEE FROM PARTNERSHIP-FIRM IS NOT A PART OF IN COME AS IT DOES NOT FALL UNDER THE PROVISIONS OF SECTION 28 OF THE IT ACT AN D THEREFORE, THE ASSESSEE IS NOT ENTITLED TO ANY DEDUCTION UNDER THE SECTION 35AC. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION U/S.80GGA IN HIS RETURN OF INCOME AND, THEREFORE, T HE AO AND THE CIT(A) HAVE RIGHTLY DISALLOWED THE CLAIM OF THE ASS ESSEE. HE HAS THEREFORE SUPPORTED THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE COMPUTATION OF INCOME FILED BY TH E ASSESSEE AND PLACED ON RECORD AT PAGE 9 OF THE PAPER-BOOK, IT SEEMS THA T THE ASSESSEE HAS LOSS OF RS.2,573/- FROM PARTNERSHIP-FIRM AND HAS NOT REC EIVED ANY REMUNERATION OR INTEREST FROM FIRM. THE ASSESSEE H AS CLAIMED DEDUCTION U/S.35AC FOR AGGREGATE AMOUNT OF RS.4,90,000/-. ASSESSEE HAD NOT MADE ANY CLAIM FOR DEDUCTION U/S.80GGA IN HIS RETU RN OF INCOME BUT HAD MADE A CLAIM OF THE AMOUNT OF CONTRIBUTION OF R S.4,90,000/- U/S.80GGA BEFORE CIT(A). ITA NO.2709/AHD /2012 SHRI SURESHCHANDRA RAMANLAL SHAH VS. ITO ASST.YEAR - 2009-10 - 6 - 5.1. IN THE CASE OF NATIONAL THERMAL CO.LTD.(SUPRA ), THE HONBLE SUPREME COURT HAS HELD AS UNDER:- THE PURPOSE OF ASSESSMENT PROCEEDINGS BEFORE THE T AXING AUTHORITY IS TO ASSESS CORRECTLY THE TAX LIABILITY OF ASSESSEE IN ACCORDANCE WITH LAW. IF FOR EXAMPLE, AS RESULT OF JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDING IT IS FOUND THAT NON TAXABLE ITEM IS TAXED OR PERMISSIBLE DEDUCTION IS DENIED, WE DO NOT SEE ANY REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RA ISING THAT QUESTION BEFORE TRIBUNAL FOR THE FIRST TIME SO LONG AS RELEVANT FACTS ARE ON RECORD IN RESPECT OF THAT ITEM. 5.2. FURTHER, IN THE CASE OF MAYANK PODDAR(HUF) V S. WEALTH OFFICER 262 ITR 633 (CAL.), THE HONBLE CALCUTTA HIGH COURT HAS HELD AS UNDER:- HELD .. UNLESS THE DEFINITION OF NET WEALTH R/W THE D EFINITION OF 'ASSET' AS PROVIDED IN S. 2(M) AND S. 2(EA), RESPECTIVELY, INCLUDES A BUIL DING LET OUT TO A TENANT USED FOR COMMERCIAL PURPOSES, THE SAME CANNOT BE SUBJECTED TO W EALTH-TAX. EVEN IF THE ASSESSEE HAD INCLUDED THE SAME IN HIS RETURN, THAT WOULD NOT PRECLUDE THE ASSESSEE FROM CLAIMING THE BENEFIT OF LAW. THERE CANN OT BE ANY ESTOPPEL AGAINST STATUTE. A PROPERTY, WHICH IS NOT OTHERWISE TAXABLE, CANNOT BECOME TAXABLE BECAUSE OF MISUNDERSTANDING OR WRONG UNDERSTANDING OF LAW BY THE ASSESSEE OR BECAUSE OF HIS ADMISSION OR ON HIS MISAPPREHENSION. IF IN LAW AN ITEM IS NOT TAXABLE, NO AMOUNT OF ADMISSION OR MISAPPREHENSION CA N MAKE IT TAXABLE. THE TAXABILITY OR THE AUTHORITY TO IMPOSE TAX IS INDEPEND ENT OF ADMISSION. NEITHER THERE CAN BE ANY WAIVER OF THE RIGHT BY THE ASSESSEE . THE DEPARTMENT CANNOT RELY UPON ANY SUCH ADMISSION OR MISAPPREHENSION IF IT IS NOT OTHERWISE TAXABLE. THEREFORE, THE BUILDING IN QUESTION COULD NOT COME WI THIN THE DEFINITION OF 'ASSET' AS WAS HELD BY THE TRIBUNAL. CIT VS. BHASKAR MITTER (1994) 73 TAXMAN 437 (CAL) AND CIT VS. AJAX PRODUCTS LTD . (1965) 55 ITR 741 (SC) APPLIED. (PARAS 4 TO 6, 8, 10 & 12) 6. FROM THE ORDER OF CIT(A), IT IS SEEN THAT HE HAS NOT ALLOWED THE CLAIM OF ASSESSEE UNDER SECTION 80GGA ONLY FOR THE REASON THAT THE CLAIM WAS NOT MADE IN THE RETURN OF INCOME BUT WAS MADE B EFORE HIM FOR THE FIRST TIME. HE HAS NOT DECIDED THE CLAIM OF ASSESS EE ON MERITS. AS HELD ITA NO.2709/AHD /2012 SHRI SURESHCHANDRA RAMANLAL SHAH VS. ITO ASST.YEAR - 2009-10 - 7 - BY THE HONBLE COURTS THAT THE ASSESSEE SHOULD NOT BE PREVENTED FROM RAISING THE GROUND OF CORRECT TAXABILITY OF HIS INC OME BEFORE APPELLATE AUTHORITIES. LOOKING TO THE FACTS AND CIRCUMSTANCE S OF THE CASE AND IN THE LIGHT OF THE DECISIONS CITED SUPRA, WE ARE OF THE V IEW THAT THE MATTER BE REMITTED BACK TO THE FILE OF CIT(A) FOR HIM TO DECI DE THE ISSUE ON MERITS AFTER GIVING A REASONABLE OPPORTUNITY OF HEARING TO ASSESSEE. THEREFORE, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 7. APROPOS TO GROUND NO.2, LOOKING TO THE SMALLNESS OF AMOUNT INVOLVED IN THE ADDITION, THE LD.COUNSEL FOR THE AS SESSEE HAS NOT SERIOUSLY PRESSED AND, THEREFORE, THE GROUND IS DISMISSED AS SUCH. 8. IN THE RESULT, ASSESSEE S APPEAL IS PARTLY ALLOWE D FOR STATISTICAL PURPOSE ONLY. SD/- S D/- ( D.K. TYAGI ) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTAN T MEMBER AHMEDABAD; DATED 15/ 03 /2013 &.., .(../ T.C. NAIR, SR. PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) *+ , / CONCERNED CIT 4. , () / THE CIT(A)-XVI, AHMEDABAD 5. /01 ((*+, *+#, 23$)$ / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. % & / BY ORDER, / ( //TRUE COPY// '/% () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD