The ITO, Ward-2, Navsari V. Shri Harilal Dhedabhai Patel, Navsari

ITA 2788/AHD/2010

• Counselvise Citation: 278820514 RSA 2010
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 04-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Benefit of exemption

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BENCH, AHMEDABAD .., ! '#$ '#$ '#$ '#$ % &', ! BEFORE SHRI B.P.JAIN,ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER APPEAL(S) BY APPELLANT VS. RESPONDENT SL. NO(S). ITA NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 2788/AHD/2010 2007-08 ITO WARD-2 NAVSARI SHRI HARILAL DHEHABHAI PATEL SIVECHCHHA SOCIETY B/H.NEW POLICE QTR. THALA CHIKHLI DIST.NAVSARI PAN ADWPP 0736 F 2. 2802/AHD/2010 2008-09 ACIT VALSAD CIRCLE VALSAD SMT.HIRABEN KHUSHROD BHARUCHA A/3, GIRA HOUSE TITHEL ROAD, VALSAD PAN : ABQPB 8952 Q 3. 2794/AHD/2010 2007-08 ITO WARD- 4,NAVSARI SHRI THAKORBHAI FABIRBHAI PATEL 797, TANK FALIA AT GANDEVI, DIST.NAVSARI PAN : AANPP 3413 F REVENUE BY : SL NOS.1-3. SHRI K.C. MATHEWS , SR.DR ASSESSEE BY : SL. NO.1.SHRI ANKIT TALSANIA , AR 2. NONE- 3. NONE- %#( ) ' / / / / DATE OF HEARING : 24/09/2013 +,- ) ' / DATE OF PRONOUNCEMENT : 27/09/2013 . / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE THREE APPEALS BY THE REVENUE ARE DIRECTED A GAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TA X(APPEALS)-VALSAD ITA NOS.2788,2802 & 2794/AHD/2010 ITO/ACIT VS. SHRI HARILAL D.PATEL, HIRABEN K. BHARU CH AND THAKORBHAI F.PATEL (RESPECTIVELY) ASST.YEARD 2007-08, 2008-09 & 2007-08 - 2 - (CIT(A) FOR SHORT) ALL DATED 16/07/2010, PERTAI NING TO ASSESSMENT YEARS (AYS)2007-08, 2008-09 AND 2007-08 IN THE CASE (S) OF SHRI HARILAL D.PATEL, HIRABEN K.BHARUCHA AND THAKORBHAI F.PATEL RESPECTIVELY. SINCE THE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY A COMMON ORDE R FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO .2788/AHD/2010 IN THE CASE OF SHRI HARILAL D.PATEL, WHEREIN FOLLOWING COM MON GROUNDS HAVE BEEN TAKEN BY THE REVENUE:- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A), VALSAD HAS ERRED IN ALLOWING THE BASIC E XEMPTION OF RS.5,00,000/- U/S.10(10C) OF THE ACT IN RESPECT OF EX-GRATIA PAYMENT RECEIVED BY THE ASSESSEE ON HIS VOLUNTARILY RETIREM ENT FROM THE SBI. (I) THE BENEFIT OF BASIC EXEMPTION OF RS.5,00,000/- U/S .10(10C) OF THE ACT RECEIVED UNDER THE EARLY EXIT OPTION SCHEME IS NOT CONFORMITY WITH THE REQUIREMENT OF RULE2BA OF THE I T RULES, 1962. (II) THE STATE BANK OF INDIA ALSO, VIDE LETTER DATED 08/ 01/2008, HAS CATEGORICALLY STATED THAT THE EXIST OPTION SCHEME I S NOT ELIGIBLE FOR TAKING BENEFITS U/S.10(10C) OF THE IT ACT. (III) THE BOARD VIDE ITS INSTRUCTION NO.F.NO.200/34/2009 ITA.I DATED 06.10.2009 AND ALSO THE CHIEF C.I.T. AHMEDABA D VIDE LETTER NO.CC/ABD/HQ/TECH/EXEMPTION/10(10C)/2008-09 DATED 03/07//2009 HAVE ISSUED INSTRUCTION NOT TO GRANT BA SIC EXEMPTION OF RS.5,00,000/- U/S.10(10C) OF THE ACT RECEIVED BY AN EMPLOYEE RETIRED VOLUNTARILY UNDER EXIST OPTION SCHEME OF SB I. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A), VALSAD OUGHT TO HAVE UPHELD THE ORD ER OF THE A.O. 3) IT IS, THEREFORE, PRAYED TO SET-ASIDE THE ORDER OF THE CIT(A), VALSAD AND RESTORED THE ORDER PASSED BY THE A.O. ITA NOS.2788,2802 & 2794/AHD/2010 ITO/ACIT VS. SHRI HARILAL D.PATEL, HIRABEN K. BHARU CH AND THAKORBHAI F.PATEL (RESPECTIVELY) ASST.YEARD 2007-08, 2008-09 & 2007-08 - 3 - 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN EX-EMPLOYEE OF STATE BANK OF INDIA AND RETIRED VOLUNTARILY ON 01/02/2007 UNDER EXIT OPTION SCHEME OF SBI. HE RECEIVED EX-GRATIA PAYMENT OF RS.8,25,712/- AND CLAIMED EXEMPTION OF RS.5 LACS U/S 10(10C) OF THE A CT. THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 29/07/2009 WHEREB Y THE ASSESSING OFFICER(AO) DISALLOWED THE CLAIM OF RS.5 LACS AND M ADE OTHER ADDITIONS OF LEAVE ENCASHMENT AND INTEREST INCOME. AS AGAINS T THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CON SIDERING THE SUBMISSIONS, PARTLY ALLOWED THE APPEAL. WHILE PART LY ALLOWING THE APPEAL, THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSE SSEE IN RESPECT OF EXEMPTION CLAIMED U/S.10(10C) OF THE ACT AND CONFIR MED THE ADDITION MADE BY THE AO ON ACCOUNT OF LEAVE ENCASHMENT. 4. THE LD.DR SUBMITTED THAT THE EMPLOYER OF THE ASS ESSEE ITSELF HAS CONTENDED THAT THE SCHEME IS NOT IN CONFORMITY WITH THE REQUIREMENT OF RULE2BA OF THE IT RULES, 1962. IT IS FURTHER SUBMI TTED THAT THE PAYMENT RECEIVED UNDER EXIT OPTION SCHEME WAS NOT APPROVED BY THE LD.CIT(A) FOR DEDUCTION U/S.10(10C) OF THE ACT. 4.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY VARIOUS DECISIONS OF THE HONBL E COORDINATE BENCHES OF THIS TRIBUNAL AND THE DECISION OF BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. NAGESH DEVIDAS KULKARNI & ORS. REPORTED AT (2007) 210 CTR 471 (BOM.). THE HONBLE SUPREME COURT HAS REVERSED THE JUDGEMENT OF MADRAS ITA NOS.2788,2802 & 2794/AHD/2010 ITO/ACIT VS. SHRI HARILAL D.PATEL, HIRABEN K. BHARU CH AND THAKORBHAI F.PATEL (RESPECTIVELY) ASST.YEARD 2007-08, 2008-09 & 2007-08 - 4 - HIGH COURT RENDERED IN THE CASE OF CIT VS. M.CHELLA DURAI REPORTED AT (2009) 317 ITR 370 (MAD.). IN SUPPORT OF HIS CONTENTION, HE HAS PLACED THE DECISION OF HONBLE COORDINATE BENCH (ITAT D BENCH AHMEDAB AD) RENDERED IN THE CASE OF DCIT VS. SHRI MUKESH O.PARIKH BEARING ITA N O.633/AHD/2010 FOR AY 2007-08 & CO NO.108/AHD/2010(BY ASSESSEE), DATED 28 /06/2012, AS ALSO THE DECISION RENDERED IN THE CASE OF DCIT VS. NAGINBHAI RAVIYABHAI PATEL & OTHERS IN ITA NOS.2785/AHD/2010 & OTHERS FOR AY 200 7-08, DATED 30/04/2013. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ALSO GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. WE FIND THAT, IN THE INSTANCE CASE, THE LD .CIT(A) HAS DECIDED THIS ISSUE VIDE PARAGRAPH NOD.6.4. OF HIS ORDER BY REFER RING ON VARIOUS DECISIONS. HE HAS CONCLUDED IN PARA-6.4 OF HIS ORD ER, BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE CONTENTIONS RAISED BY THE AR OF THE APPELLANT IN HIS SUBMISSION AS WELL AS BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDER. I FOUND THE ARGUMENTS ADVANC ED BY THE AR OF THE APPELLANT ARE JUSTIFIED IN TERMS OF NATURE O F AMOUNT RECEIVED BY THE APPELLANT AND CONSIDERING THE DECISION OF TH E HONBLE KOLKATA ITAT IN THE CASE OF CIT VS.KRISHNA GOPAL SA HA 125 TTJ 577 (KOL) (3 RD MEMBER) AND CIT VS. NAGESH DEVIDAS KULKARNI & ORS. (207) 210 CTR (BOM) 471 (2007) 291 ITR 407 (MU M.), THE APPELLANT IS ELIGIBLE FOR THE BENEFIT OF EXEMPTION OF RS.5,00,000/- U/S.10(10C) OF THE ACT EVEN THOUGH THE EARLY EXIT O PTION SCHEME IS NOT IN CONFORMITY WITH THE REQUIREMENT OF RULE 2 BA OF THE IT RULES, 1962. THUS, THE APPELLANT SUCCEEDS IN THESE GROUNDS OF APPEAL. THE APPELLANTS GROUND NO.2 AND 3 ARE ALLO WED. 5.1. THE LD.CIT(A) HAS SUPPORTED THE DECISION OF HO NBLE COORDINATE BENCHES AND DECISION OF HONBLE BOMBAY HIGH COURT. WE FIND THAT THE ITA NOS.2788,2802 & 2794/AHD/2010 ITO/ACIT VS. SHRI HARILAL D.PATEL, HIRABEN K. BHARU CH AND THAKORBHAI F.PATEL (RESPECTIVELY) ASST.YEARD 2007-08, 2008-09 & 2007-08 - 5 - HONBLE COORDINATE BENCH IN ITA NO.633/AHD/2010(SUP RA) HAS ALSO FOLLOWED THE DECISION OF THE BOMBAY HIGH COURT AND DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE. THE LD.SR.DR DID NOT PLACE ON RECORD ANY CONTRARY DECISIONS AND ALSO COULD NOT POINT OUT AS THE DECIS IONS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE ON T HE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. SINCE THIS ISSU E HAS ALREADY BEEN DECIDED BY VARIOUS JUDICIAL PRONOUNCEMENTS, THEREFO RE RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUES APPEAL IS DISMISSED. 6. AS A RESULT, THE APPEAL OF THE REVENUE IN ITA NO .2788/AHD/2010 IN THE CASE OF SHRI HARILAL D.PATEL IS DISMISSED. 7. NOW, WE TAKE UP THE REVENUES TWO APPEALS, I.E. ITA NOS.2802/AHD/2010 (FOR AY 2008-09) & 2794/AHD/2010 (FOR AY 2007- 08) IN THE CASE(S) OF HIRABEN KHUSHROD BHARUCHA & T HAKORBHAI FAKIRBHAI PATEL RESPECTIVELY. 8. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAV E HEARD THE LD.SR.DR AND PERUSED THE MATERIAL AVAILABLE ON RECO RD. 9. SINCE THE FACTS AND CIRCUMSTANCES ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES IN REVENUES APPEAL, I.E. ITA NO.2788 /AHD/2010, IN THE CASE OF SHRI HARILAL D.PATEL (SUPRA), WE CONFIRM TH E ORDERS OF THE ITA NOS.2788,2802 & 2794/AHD/2010 ITO/ACIT VS. SHRI HARILAL D.PATEL, HIRABEN K. BHARU CH AND THAKORBHAI F.PATEL (RESPECTIVELY) ASST.YEARD 2007-08, 2008-09 & 2007-08 - 6 - LD.CIT(A) IN BOTH THE CASES AND FOR THE SAME REASON ING STATED IN THE REVENUES APPEAL (I.E.ITA NO.2788/AHD/2010-SUPRA), WE DISMISS BOTH THE APPEALS OF THE REVENUE. 10. IN THE COMBINED RESULT, ALL THE THREE APPEALS O F THE REVENUE IN THE CASE(S) OF THREE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE SD/- SD/- ( .. ) (% &') ! ! ( B.P. JAIN ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/ 09 /2013 1.., #.../ T.C. NAIR, SR. PS . ) 2'3 43-' . ) 2'3 43-' . ) 2'3 43-' . ) 2'3 43-'/ COPY OF THE ORDER FORWARDED TO : 1. 56 / THE APPELLANT 2. 2756 / THE RESPONDENT. 3. $$ ' %8 / CONCERNED CIT 4. %8() / THE CIT(A)-VALSAD 5. 3#&9 2' , , / DR, ITAT, AHMEDABAD 6. 9: ;( / GUARD FILE. .% .% .% .% / BY ORDER, 73' 2' //TRUE COPY// < <<