MRUDULA TEKRIWAL, BANGALORE V. ASST CIT CEN CIR 38, MUMBAI

ITA 2956/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0337 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JANARDHANAN
• Assessee Lawyers: M A C SURESH MUTHUKRISHNAN
• Keywords: Opportunity of being heard
• Section: 80C; 5(2); 68; 69

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.2956/MUM/2017 : ASST.YEAR 2009-2010 SMT.MRIDULA TEKRIWAL 3006, 2 ND FLOOR, 12 TH B MAIN HAL 2 ND STAGE BANGALORE 560 038. PAN : ABVPT2446F. / VS. ASST.COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 38 MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI M.A.C.SURESH MUTHUKRISHNAN /RESPONDENT BY : SHRI V.JANARDHANAN / DATE OF HEARING : 05.07.2017 / DATE OF PRONOUNCEMENT : 16.08.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 13.12.2016 AND PERTAINS TO ASSESSMENT YEAR 2009-2010. 2. THE ISSUE RAISED IS THAT THE LEARNED CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.7,38,991 AS INCOME FROM OTHER SOURCES MADE ON ACCOUNT OF THE FOREIGN REMITTANCES RECEIVED UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE ASSESSEES CASE. 3. THE ASSESSEE HAS FURTHER RAISED FOLLOWING ADDITIONAL GROUND:- WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED AO OUGHT TO HAVE ALLOWED THE DEDUCTION U/S 80C OF THE ACT TO THE EXTENT OF RS.1,00,000/- WHILE COMPUTING THE INCOME OF THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.2956/MUM/2017. SMT.MRIDULA TEKRIWAL. 2 4. ON THIS ISSUE, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.7,38,991 IN ABSENCE OF FOREIGN INWARD REMITTANCE CERTIFICATE (FIRC) BY OBSERVING AS UNDER:- ON PERUSAL OF ICIC BANK ACCOUNT NO.36601075017 SUBMITTED BY THE ASSESSEE, IT IS NOTICED THAT RS.7,38,991/- IS CLAIMED TO BE DEPOSITED / CREDITED IN THE BANK ACCOUNT ON ACCOUNT OF TRANSFER FROM SELF-INDONESIA ACCOUNT. IN THIS REGARD, THE ASSESSEE WAS ASKED TO SUBMIT FOREIGN INWARD REMITTANCE CERTIFICATE (FIRC) OF BANK, SOURCE OF SUCH FUNDS, PROOF THAT SUCH AMOUNT IS HER OWN FUNDS AND HENCE NOT TAXABLE. 5. BEFORE THE LEARNED CIT(A), THE ASSESSEE SUBMITTED FIRC FOR US$ 34,925. HOWEVER, THE LEARNED CIT(A) HELD THAT ASSESSEE HAS REMITTED ALMOST 50% OF THE GROSS AMOUNT EARNED BY HER. HE PROCEEDED TO DISBELIEVE THE CREDITWORTHINESS AND CONFIRMED THE DISALLOWANCE. 6. AGAINST THIS ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LEARNED COUNSEL OF THE ASSESSEE REFERRED TO THE PROVISIONS OF SECTION 5(2) OF THE INCOME-TAX ACT, 1961. HE FURTHER SUBMITTED THAT THE INCOME OF A NON-RESIDENT WHETHER THE SAME IT TAXABLE OR NOT IS TO BE DECIDED WITH REFERENCE TO PROVISIONS OF SECTION 5(2) AND PROVISIONS OF SECTION 68 OR 69 CANNOT ENLARGE SCOPE OF SECTION 5(2). FOR THIS PROPOSITION, HE REFERRED TO THE FOLLOWING CASE LAWS:- (I) DCIT V. FINLAY CORPORATION LTD. [(2003) 86 ITD 626 (DEL.)] ITA NO.2956/MUM/2017. SMT.MRIDULA TEKRIWAL. 3 (II) DCIT V. MADHUSUDAN RAO [(2015) 57 TAXMANN.COM 262 (HYD-TRI)] [68 SOT 515] 8. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS AND HENCE THE AMOUNT HAS RIGHTLY BEEN ADDED TO THE INCOME. 9. UPON CAREFUL CONSIDERATION, I FIND THAT ASSESSEE HAS DULY SUBMITTED FOREIGN INWARD REMITTANCE CERTIFICATE. THE SAID CERTIFICATE DULY SHOWS THAT THE AMOUNT WAS RECEIVED IN THE ASSESSEES ACCOUNT IN INDIA FROM HER OWN ACCOUNT IN JAKARTA (INDONESIA). THE FIRC SUBMITTED DULY DEMONSTRATES THAT THE AMOUNT HAS DULY BEEN TRANSFERRED FROM HER ACCOUNT IN JAKARTA. AS PER THE PROVISIONS OF SECTION 5(2), THE FOLLOWING INCOME OF NON-RESIDENT IS TAXABLE:- (A) THE SAME WHICH IS RECEIVED OR IS DEEMED TO BE RECEIVED IN INDIA IN SUCH YEAR BY AND ON BEHALF OF SUCH PERSON; (B) ACCRUES OR ARISE OR IS DEEMED TO ACCRUES OR ARISE TO HIM IN INDIA DURING SUCH YEAR. 10. HERE IT IS NOTED THAT THE SAID SUM WAS DULY TRANSFERRED FROM ASSESSEES ACCOUNT IN JAKARTA (INDONESIA) TO HER ACCOUNT IN INDIA. HENCE THIS SUM IS CLEARLY NOT TAXABLE UNDER THE PROVISIONS OF SECTION 5(2). THIS PROPOSITION IS DULY SUPPORTED BY THE CASE LAWS CITED BY THE LEARNED COUNSEL OF THE ASSESSEE AS ABOVE. ITA NO.2956/MUM/2017. SMT.MRIDULA TEKRIWAL. 4 11. HENCE IN THE BACKGROUND OF THE DISCUSSION AND PRECEDENTS, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 12. AS REGARDS THE ISSUE OF ADDITIONAL GROUND WITH REFERENCE TO DEDUCTION U/S 80C IS CONCERNED, IT IS TRITE LAW THAT ASSESSEE IS ENTITLED TO RELIEF AS DULY ACCRUING TO HER, HENCE THE ASSESSING OFFICER SHALL EXAMINE THIS ASPECT ALSO AND DECIDE AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 16 TH DAY OF AUGUST, 2017. SD/- ( SHAMIM YAHYA ) ACCOUNTANT MEMBER MUMBAI; DATED : 16 TH AUGUST, 2017. DEVDAS* / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.