ACIT, New Delhi V. Mr. Kanwarjit Singh Bhutani, Gurgaon

ITA 2883/DEL/2010

• Counselvise Citation: 288320114 RSA 2010
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-07-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 09-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Keywords: Rectification of order; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI I. C. SUDHIR, JUDICIAL MEMBER ITA NO. 2883/DEL/2010 ASSESSMENT YEAR: 2002- 2003 ACIT VS. KANWARJIT SINGH BHUTANI, CIRCLE-48(1), C/O TOPPERWARE IND IA PVT. LTD. ROOM NO. 624, 4 TH FLOOR, IA, UDYOG VIHAR, SECTOR-18, MAYUR BHAWAN, GURGAON 122001 HARYANA. CONNAUGHT PLACE, AEYPB6853J NEW DELHI 110 001. (APPELLANT) (RE SPONDENT) APPELLANT BY : SHRI R.S. NEGI, SR. D R. RESPONDENT BY : SHRI K.M. GUPTA , AR DATE OF HEARING : 02/07/2012 DATE OF PRONOUNCEMENT : /2012 ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS IMPUGNED FIRST APPELLATE ORDE R ON THE FOLLOWING GROUNDS:- (I) DIRECTING THE AO TO EXCLUDE THE PERQUISITE VALU E OF TAX BORNE BY THE EMPLOYER AMOUNTING TO ` 47,62,102/- WHILE GROSSING UP OF NET TAXABLE INCOME UNDER SECTION 195 A OF THE I.T. ACT WHICH IS CONTRARY TO THE DECISION OF THE LD. CIT(A)-XXX, VID E ORDER DATED 6.7.2006 IN APPEAL NO. 155/05-06. ITA NO. 2883/DEL/2010 2 (II) HOLDING THAT PERQUISITE VALUE OF TAX BORNE BY THE EMPLOYER AMOUNTING TO ` 47,62,102/- IS ALREADY INCLUDED IN THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE AND THE SAME IS EMANATING FROM THE ORDER U/S 154/250 DATED 28/7/2006 OF THE C IT(A), WHEREAS THE SAID ORDER NOWHERE MENTIONS THE AMOUNT UNDER DISPUTE I.E. 47,62,102/- AND MORE SO THE SAID ORDER WAS NOT ACCEPTED BY THE DEPARTMENT AND WAS APPEALED AGAINST BEFORE THE HONBLE ITAT, WHO IN TURN RESTORED THE MATTER BACK TO THE AO. (III) IGNORING THE FACT THAT THE ASSESSEES CLAIM T HAT THE TAX BORNE BY THE EMPLOYER IS ALREADY INCLUDED IN THE SALARY UNDER TH E HEAD SPECIAL ALLOWANCES BUT NEITHER FORM NO. 16 NOR FORM NO. 12 BA NOR ANY OTHER DOCUMENTARY EVIDENCE EXCEPT ASSESSEES OWN CO MPUTATION OF INCOME REFLECTS THE SAID ALLOWANCES WHICH ABDUNTALY PROVES THAT THE ASSESSEE IS ONLY MANIPULATING THE FIGURES IN HI S COMPUTATION OF INCOME TO EVADE TAX LIABILITY 2. THE GRIEVANCE OF THE REVENUE IN THE PRESENT APPE AL IS THAT THE LD. CIT(A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE TAX BORNE BY THE EMPLOYER IS ALREADY INCLUDED IN THE SALARY UNDER THE HEAD SPEC IAL ALLOWANCES WITHOUT VERIFYING FORM NO. 16 OR FROM NO. 12BA OR ANY OTHER DOCUMENTARY EVIDENCE. THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS ACCEPT ED THE CLAIM ON THE BASIS OF ASSESSEES OWN COMPUTATION OF INCOME REFLECTING SAI D ALLOWANCES WITHOUT APPRECIATING THAT THE ASSESSEE IS ONLY MANIPULATING THE FIGURES IN HIS COMPUTATION OF INCOME TO EVADE TAX LIABILITY. HE SUBMITTED THAT THE LD. CIT(A) IN ITS ORDER DATED 28.7.2006 DOES NOT MENTION THE AMOUNT UNDER D ISPUTE I.E. ` 47,62,102/ - IS IS ALREADY INCLUDED IN THE REVISED RETURN OF INCOME FI LED BY THE ASSESSEE. HE SUBMITTED THAT THE REVENUE HAD NOT ACCEPTED THE SAI D FIRST APPELLATE ORDER DATED 28.7.2006 AND THE SAME WAS QUESTIONED BEFORE THE TR IBUNAL. THE TRIBUNAL IN TURN HAD RESTORED THE MATTER BACK TO THE AO. ITA NO. 2883/DEL/2010 3 3. THE LD. AR ON THE OTHER HAND TRIED TO JUS TIFY THE FINDING OF THE LD. CIT(A) ON THE ISSUE. HE SUBMITTED THAT THE REVENUE HAD PREFERRED APPEAL BEFORE THE TRIBUNAL AGAINST THE APPELLATE ORDER DATED 28.7 .2006 QUESTIONING THE DIRECTION OF THE LD. CIT(A) TO THE AO TO ADOPT THE TAX PERQUISITE OF ` 6,70,432/- INSTEAD OF ` 62,75,595/-. THE GROUND RAISED BY THE DEPARTMENT B EFORE THE TRIBUNAL WAS THAT THE LD. CIT(A) HAS ERRED IN ALLOW ING THE VALUE OF PERQUISITE AS ` 56,70,432/- INSTEAD OF ` 62,75,595/- ON ACCOUNT OF TDS. THUS IT IS CLEAR TH AT THE DIRECTION OF THE LD. CIT(A) THAT THE TAX PERQUI SITE ALREADY TAKEN INTO THE REVISED TAX RETURN REQUIRES TO BE EXCLUDED FROM THE ASSESSED INCOME HAS BECOME FINAL AND BINDING ON THE DEPARTMENT. BESIDES, THE L D. AR REFERRED PAGE NO. 4 AND 86 OF THE PAPER BOOK FILED BY THE ASSESSEE. AT PAGE NO. 4 HAS BEEN MADE AVAILABLE THE COPY OF COMPUTATION ATTACHED WITH RE VISED RETURN AND AT PAGE NO. 86 OF THE PAPER BOOK HAS BEEN MADE AVAILABLE THE CO PY OF THE LETTER DATED 18.12.2008 WRITTEN BY THE EMPLOYER OF THE ASSESSEE TO THE LD. DCIT CERTIFYING THAT SPECIAL ALLOWANCE SHOWN IN THE RETURN OF INCOM E REPRESENTS THE TAX BORNE BY TIPL ON BEHALF OF SHRI KANWARJIT SINGH BHUTANI. HE SUBMITTED FURTHER THAT FORM NO. 16 CANNOT BE MODIFIED. 4. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT THE LD. CIT(A) HAS PASSED A COMPREHENSIVE FIRST APPELLATE ORDER NARRAT ING THE SEQUENCE OF EVENTS OF PASSING OF ORIGINAL ASSESSMENT ORDER, RECTIFICATION ORDER, FIRST APPELLATE ORDER AND ORDER OF THE TRIBUNAL IN THE FIRST ROUND. HE HAS AL SO NARRATED THE SEQUENCE OF EVENTS ON PASSING OF ASSESSMENT ORDER IN COMPLIANCE OF THE ORDER OF THE TRIBUNAL ITA NO. 2883/DEL/2010 4 ETC. WITHOUT DISCUSSING THESE EVENTS HERE WE NOTE T HAT THE LD. CIT(A) HAS GIVEN A FINDING ON THE ISSUE IN PARA NO. 7.1 OF THE FIRST APPELLATE ORDER. SHE HAS DIRECTED THE AO TO EXCLUDE THE PERQUISITE VALUE OF THE TAX BORNE BY THE EMPLOYER AMOUNTING TO ` 47,62,102/- WHILE GROSSING UP OF NET TAXABLE INCOM E UNDER SECTION 195A OF THE ACT AND FURTHER TO CONSIDER THE INITIAL TAX SLAB RATE WHILE APPLYING THE GROSSING UP FACTOR INSTEAD OF 160/6914 TO WHOLE OF THE TOTAL INCOME ON THE BASIS THAT HER PREDECESSOR VIDE ORDER DATED 28 TH JULY, 2006 U/S 154/250 HAD ALREADY DIRECTED TO EXCLUDE THE TAX BORNE BY TH E EMPLOYER ALREADY INCLUDED IN THE REVISED TAX RETURN AND THAT THE TRIBUNAL (IT A NO. 2874/DEL/2006) HELD THAT IT IS AN ADMITTED FACT THAT IN THIS CASE THE INCOME TAX PAYABLE ON BEHALF OF THE ASSESSEE WAS TO BE BORNE BY THE EMPLOYER. SHE HAS A LSO NOTED THAT IT IS AN ADMITTED FACT THAT PERQUISITE VALUE OF TAX BORNE BY THE EMPLOYER AMOUNTING TO ` 47,62,102/- HAS ALREADY BEEN INCLUDED IN THE REVIS ED RETURN OF INCOME FILED BY THE ASSESSEE. WITHOUT GOING INTO THIS CONTROVERSY T HAT ON EARLIER OCCASION THE FIRST APPELLATE AUTHORITY VIDE ITS ORDER DATED 28 TH JULY, 2006 AND THE TRIBUNAL IN ITA NO. 2874/D/2006 BY INFERENCE AND IMPLICATION HA VE ACCEPTED OR NOT THE CLAIM OF THE ASSESSEE THAT TAX BORNE BY THE EMPLOYE R ALREADY INCLUDED IN THE REVISED TAX RETURN IS TO BE EXCLUDED, WE IN THE INT EREST OF JUSTICE SET ASIDE THE MATTER TO THE FILE OF THE AO TO VERIFY THIS MATERIA L FACT AS TO WHETHER PERQUISITE WAS INCLUDED IN THE SALARY STATEMENT TO THE ASSESSE E OR NOT AND IF HE FINDS THAT IT WAS INCLUDED IN THE SALARY STATEMENT OF THE ASSESSE E, THEN HE IS DIRECTED TO EXCLUDE THE TAX BORNE BY THE EMPLOYER ALREADY INCLU DED IN THE REVISED TAX RETURN ITA NO. 2883/DEL/2010 5 WHILE GROSSING UP THE NET TAXABLE INCOME U/S 195A O F THE ACT. THE AO IS FURTHER DIRECTED TO CONSIDER THE INITIAL TAX SLAB RATE WHIL E APPLYING THE GROSSING UP FACTOR INSTEAD OF 100/69.4 TO WHOLE OF THE TOTAL INCOME I F THE OUTCOME OF THE ABOVE DIRECTION IS FAVOURABLE TO THE ASSESSEE. THE GROUND S ARE THUS ALLOWED FOR STATISTICAL PURPOSES. 5. CONSEQUENTLY APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7.9.2012. SD/- SD/- ( G.D. AGRAWAL) ( I. C. SUDHIR ) VICE PRESIDENT JUDICIAL MEMBER *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT