Shri Ashwin Patangiya, Indore V. The ACIT, 4(1), Indore

ITA 302/IND/2012

• Counselvise Citation: 30222714 RSA 2012
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE; R P MANDOVRA CAS
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ACAPP3544J I.T.A.NO. 302 /IND/201 2 . A.Y. : 2007 - 08 SHRI ASHWIN PATANGIYA, ACIT, 185,VINDHYACHAL NAGAR, VS 4(1), IND ORE INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S. S. DESHPANDE AND SHRI R. P. MANDOVRA, CAS RESPONDENT BY : SHRI R. A. VERMA, SR. DR DATE OF HEARING : 26 .0 7 .2012 DATE OF PRONOUNCEMENT : 01 . 0 8 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 5.12.2010 FOR THE ASSESSMENT YEAR 2 007-08 WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE AS SESSEE :- -: 2: - 2 1. THAT THE ORDER OF THE LD. CIT(A) IS BAD, BOTH IN LAW & ON FACTS. 2. THAT ON THE FACTS, IN LAW & IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER HAS ERRED IN DISALLOWING THE REBATE OF STT U/S 88E OF THE INCOME-TAX ACT, 1961. THE DISALLOWANCE OF REBATE OF STT BY THE ASSESSING OFFICER AND AS SUSTAINED BY THE LD.CIT(A) IS ARBITRARY, UNWARRANTED ON FACTS A ND BAD IN LAW. 3. THAT ON THE FACTS, IN LAW & AND IN THE CIRCUMSTA NCES OF THE CASE, THE ASSESSING OFFICER HAS ERRED IN ASSESSING THE INCOME OF THE APPELLANT U/S 23(4) BY RS. 1,24,800/- BY ESTIMATING ANNUAL VALUE OF HOUSE AT SHIKSHAK NAGAR. THE ENHANCEMENT AS MADE BY CIT(A) IS ARBITRARY & EXCESSIVE. 4. THAT ON THE FACTS, IN LAW AND IN THE CIRCUMSTAN CES OF THE CASE, THE ASSESSING OFFICER HAS ERRED IN ASSESSING RS. 3,54,000/- ON ESTIMATION OF HOUSE -: 3: - 3 HOLD EXPENSES. THE ENHANCEMENT AS MADE BY CIT(A) IS ARBITRARY, UNWARRANTED ON FACTS AND BAD IN LAW. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE ASSESSEE HAS FILED ITS RETURN OF INCOM E IN FORM ITR-4 ELECTRONICALLY ON 28.2.2007. ON PAGE 9, PART- B, ITEM NO.2 REBATE U/S 88E WAS SHOWN AND CLAIMED AT RS. 7,96,923/-. THE RETURN WAS PROCESSED AND INTIMATION U/S 143(1)(I) WAS ISSUED, WHEREIN REBATE CLAIMED U/S 88 E WAS NOT CONSIDERED AND ALLOWED WHILE CALCULATING THE NET TA X AMOUNT PAYABLE BY THE ASSESSEE. THE ASSESSING OFFICER OBSE RVED THAT THE ASSESSEE NEEDED TO CLAIM THE STT VIA FORM 10DB . HOWEVER, ASSESSEE SUBMITTED THE FORM 10DB BUT THER E HAS BEEN NO CLAIM OF STT ON ACCOUNT OF SECURITIES TRANS ACTIONS ENTERED INTO IN THE COURSE OF HIS BUSINESS AS COLUM N NO. 5 OF THE FORM 10DB IS NIL (NOTHING IS MENTIONED). COLUMN 5 IS FOR THE VALUE OF THE TRANSACTIONS ENTERED INTO IN THE C OURSE OF BUSINESS BY THE ASSESSEE. THEREFORE, IT WAS HELD BY ASSESSING OFFICER THAT THE ASSESSEE DOES NOT HAVE ANY RIGHT T O CLAIM REBATE U/S 88E. -: 4: - 4 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THERE IS NO DISPUTE TO THE FACT TH AT THE ASSESSEE HAD ACTUALLY PAID STT AND THE SAME WAS CLA IMED IN THE RETURN FILED ELECTRONICALLY. HOWEVER, IN THE IN TIMATION RECEIVED U/S 143(1)(I), THE ASSESSEE FOUND THAT REB ATE U/S 88E WAS NOT CONSIDERED. SUBSEQUENTLY, CASE WAS FIXED FO R SCRUTINY AND THE ASSESSMENT FRAMED U/S 143(3), THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SUBMITTED FORM 10B(B ), THERE WAS NO CLAIM OF STT AS COLUMN NO.5 OF FORM NO.10DB IS NIL. THUS, BY POINTING OUT CLERICAL/PROCEDURAL MISTAKE, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM. WE FOUN D THAT MISTAKE WAS CORRECTED DURING ASSESSMENT PROCEEDINGS ITSELF AND WHEN THE FACT OF STT HAVING ACTUALLY PAID ON SE CURITY TRANSACTION ENTERED BY THE ASSESSEE AND INCOME FROM WHICH HAS BEEN CONSIDERED AS A BUSINESS INCOME, THERE DOE S NOT APPEAR ANY VALID REASON FOR DISALLOWING THE CLAIM O F STT OUT OF THE TOTAL INCOME TAX WORKED OUT ON ASSESSEES INCOM E. -: 5: - 5 ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO R E-VERIFY THE ACTUAL PAYMENT OF STT BY ASSESSEE AND TO ALLOW THE CLAIM OF STT OF RS. 7,96,923/-, IF HE FINDS THAT STT WAS PAI D IN RESPECT OF SECURITY TRANSACTIONS INCOME FROM WHICH WAS ASSE SSED AS BUSINESS INCOME. WE DIRECT ACCORDINGLY. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE CIT (A) ALSO ENHANCED THE ASSESSMENT BY INCLUDING INCOME FR OM HOUSE PROPERTY AND ALSO ADDITION ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS. IN RESPECT OF ONE OF THE FLATS, W HICH WAS OCCUPIED BY THE ASSESSEES FATHER AND BROTHERS, THE CIT(A) FOUND THAT ANNUAL LETTING VALUE AS PER MUNICIPAL VA LUATION IS RS. 32,400/-. DURING THIS YEAR, NO RENT WAS PAID BY THE FATHER. THE LD. CIT(A) FURTHER OBSERVED THAT FROM 2008-09 O NWARDS FATHER OF THE ASSESSEE WAS PAYING RENT OF RS. 60,00 0/- PER ANNUM. THE CIT(A) CALCULATED THE RENT ARBITRARILY B Y ESTIMATING RS. 5/- PER SQ.FT., WHICH COMES TO RS. 1 ,24,800/- FOR WHOLE OF THE YEARS. ACCORDINGLY, ADDITION WAS M ADE BY THE LD.CIT(A). WE DO NOT FIND ANY JUSTIFICATION FOR THE HYPOTHETICAL VALUE ADOPTED BY THE LD.CIT(A). IN SOFAR AS THE ASS ESSEE WAS NOT IN RECEIPT OF ANY RENT AND THE FLAT WAS GIVEN T O FATHER AND -: 6: - 6 BROTHER OF THE ASSESSEE, THE ANNUAL LETTING VALUE A S PER MUNICIPAL VALUATION IS TO BE TAKEN AT RS. 32,400/-. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO TAK E THE ANNUAL LETTING VALUE OF HOUSE PROPERTY AT RS. 32,400/- AND ACCORDINGLY, RECOMPUTE THE INCOME FROM HOUSE PROPER TY. 6. THE CIT(A) ALSO FOUND THAT THE ASSESSEE HAD SHOWN LOW WITHDRAWALS ON ACCOUNT OF HOUSE HOLD EXPENSES A FTER CALLING VARIOUS DETAILS HE ESTIMATED HOUSE HOLD EX PENDITURE AT RS. 40,000/- PER MONTH AND AFTER DEDUCTING ACTUAL W ITHDRAWAL OF RS. 1,26,060/-, ADDITION OF RS. 3,54,000/- WAS M ADE BY THE LD.CIT(A). 7. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATI VE THAT CIT(A) HAS EXCEEDED ITS POWER AND SINCE NO ADD ITION WAS MADE NOR ANY INCRIMINATING MATERIAL WAS THERE, THE CIT(A) HAS MADE AN UNWANTED ADDITION, WHICH WAS NOT CALLED FOR . 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT THE CIT(A) HAS CALLED THE VARIOUS DETAILS OF EXPENDITURE AND THEREAFTER MADE ESTIMATION OF OVER ALL HOUSE HOLD EXPENDITURE AT RS. 40,000/- PER MONTH. AFTER C ONSIDERING THE STATUS OF ASSESSEE AND THE EXPENDITURE NECESSAR ILY -: 7: - 7 INCURRED ON ACCOUNT OF HOUSE HOLD, WE MODIFY THE OR DER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO RECOMPUT E THE AMOUNT OF ADDITION BY TAKING MONTHLY EXPENDITURE AT RS. 20,000/- PER MONTH IN PLACE OF RS. 40,000/- AS ESTI MATED BY THE LD.CIT(A). WE DIRECT ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN C OURT ON 1 ST AUGUST, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :1 ST AUGUST, 2012. CPU* 2627.1.8