Mr. Anurag Singh, Lucknow V. Asstt. Commissioner of Income Tax, Lucknow

ITA 35/LKW/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8115 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-11-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 16-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MEENA
• Assessee Lawyers: A P SINHA
• Keywords: Earning of tax free income
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.35/LKW/2014 ASSESSMENT YEAR:2010-11 SHRI. ANURAG SINGH 2/362, VIVEK KHAND GOMTI NAGAR, LUCKNOW V. ACIT RANGE III LUCKNOW PAN/PAN:ADBPS6095D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. A. P. SINHA, ADVOCATE RESPONDENT BY: SHRI. K. C. MEENA, D.R. DATE OF HEARING: 18 11 2014 DATE OF PRONOUNCEMENT: 27 11 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS WHICH ARE AS UNDER:- 1. THE LD. C.I.T., (APPEALS), LUCKNOW ERRED WHILE NOT DELETING THE ADDITION OF RS.5,81,850.00. 1(A) THE LD. C.I.T., (APPEALS), LUCKNOW ERRED WHILE NOT APPRECIATING THAT THE APPELLANT FULFILLS THE CONDITION OF CLAUSE (I) OF RULE-8 OF PART- 'A' OF FOURTH SCHEDULE OF INCOME TAX ACT, 1961. 1 (B) THE LD. C.I.T., (APPEALS), LUCKNOW ERRED WHILE NOT CONSIDERING THAT AS THE APPELLANT COMPLIES WITH CONDITIONS AS ENVISAGED IN CLAUSE (I) OF RULE-8 OF PART-'A' OF FOURTH SCHEDULE OF INCOME TAX ACT, 1961, THE INTEREST INCOME OF RS.5,81,850.00 IS EXEMPT. :- 2 -: 1 (C) THE LD. C.I.T., (APPEALS), LUCKNOW ERRED WHILE PLACING RELIANCE ON THE FOLLOWING CASE LAW OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH, BENCH-'A', DELHI IN THE CASE OF O.N.G.C. LTD. VS. I.T.O. (T.D.S.), DEHRADUN, 4 SOT 333. 2. THE LD. C.I.T., (APPEALS), LUCKNOW ERRED WHILE NOT DELETING THE ADDITION OF RS.47,361.00. 2 (A) THE LD. C.I.T., (APPEALS), LUCKNOW ERRED WHILE DISBELIEVING THE AFFIDAVIT FILED BY THE APPELLANT WITHOUT CROSS EXAMINING HIM. 2 (B) THE LD. C.I.T., (APPEALS), LUCKNOW SUSTAINED THE ADDITION OF RS.47,361.00 WITHOUT GIVING ADEQUATE OPPORTUNITY. 2. APROPOS GROUND NO.1, IT IS NOTICED THAT THE ASSESSEE HAS OBJECTED THE ADDITION OF RS.5,81,850/- BEING INTEREST INCOME RECEIVED FROM GAIL INDIA LIMITED EMPLOYEES PROVIDED FUND TRUST (THE TRUST). DURING THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS CLAIMED INTEREST RECEIVED FROM THE TRUST AMOUNTING TO RS.5,81,850/- AS EXEMPT INCOME. THE TRUST HAS DEDUCTED TAX AT SOURCE OF RS.59,931/- ON THE INTEREST AMOUNT. IT WAS ALSO NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE RETIRED FROM GAIL INDIA LTD. ON 9.6.2006 AND THE EMPLOYER OUGHT TO HAVE PAID THE ACCUMULATED BALANCE OF PF TO HIM IMMEDIATELY AFTER THE RETIREMENT, BUT THE ACCUMULATED BALANCE OF PF WAS RETAINED AFTER RETIREMENT AND INTEREST OF RS.5,81,850/- WAS PAID ON SUCH ACCUMULATED BALANCE FOR THE POST-RETIREMENT PERIOD OF FINANCIAL YEAR 2006-07 (JULY, 2006 TO MARCH, 2007) AND FINANCIAL YEARS 2007-08, 2008-09 AND 2009-10. THE TOTAL AMOUNT OF INTEREST FOR THE ABOVE MENTIONED PERIOD WAS RS.5,81,850/- ON WHICH TAX OF RS.59,931/- WAS DEDUCTED AT SOURCE BY THE TRUST. THE ASSESSING OFFICER HELD THAT THE INTEREST INCOME OF RS.5,81,850/- EARNED AFTER RETIREMENT IS TAXABLE IN THE HANDS OF THE ASSESSEE AND ADDED THE SAME TO ITS TOTAL INCOME. :- 3 -: 3. THIS ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT SINCE THIS INTEREST WAS EARNED ON THE ACCUMULATED PF, INTEREST IS NOT CHARGEABLE TO TAX AS PER PROVISIONS OF SECTION 10(12) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') READ WITH RULES 2(F); 5(3) AND 8 OF PART A OF THE FOURTH SCHEDULE. THE LD. CIT(A) RE- EXAMINED THE ISSUE IN THE LIGHT OF THE AFORESAID CONTENTIONS, BUT WAS NOT CONVINCED WITH IT AND HE ACCORDINGLY CONFIRMED THE ADDITION. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- I HAVE CONSIDERED THE MATTER. IT IS AN ADMITTED FACT THAT THE APPELLANT JOINED GAIL (INDIA) LTD. ON 11.06.1990 AND RESIGNED ON 09.06.2006 AFTER ABOUT 16 YEARS OF SERVICE. THE AO HAS CATEGORICALLY MENTIONED IN THE ASSESSMENT ORDER THAT THE INTEREST OF RS. 5,81,850/- WHICH WAS RECEIVED DURING THE YEAR IN APPEAL PERTAINED TO POST RESIGNATION PERIOD I.E. FYS 2006-07 (JULY 2006 TO MARCH 2007), 2007-08, 2008-09 AND 2009-10. THE FACT THAT THE GAIL (INDIA) LTD. HAS PAID AMOUNT OF RS.26,89,363 TOWARDS FULL AND FINAL SETTLEMENT OF THE PROVIDENT FUND ACCOUNT BY CHEQUE TO THE APPELLANT WHICH INCLUDED INTEREST OF RS. 5,81,850/- ON WHICH TAX OF RS.59,931/- HAS BEEN DEDUCTED U/S 194A OF THE ACT IS VERIFIABLE FROM THEIR LETTER DATED 07.08.2009 AND TDS CERTIFICATE. THE GAIL EMPLOYEES PROVIDENT FUND TRUST IS A RECOGNIZED PROVIDENT FUND AND GOVERNED BY PART-A OF SCHEDULE IV. AS PER PROVISIONS OF SUB SECTION (12) OF SECTION 10 THE ACCUMULATED BALANCE DUE AND BECOMING PAYABLE TO AN EMPLOYEE PARTICIPATING IN A RECOGNIZED PROVIDENT FUND TO THE EXTENT PROVIDED IN RULE 8 OF PART-A OF THE FOURTH SCHEDULE SHALL NOT BE INCLUDED IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON. HOWEVER, THIS EXEMPTION IS NOT AVAILABLE TO INTEREST ACCRUING ON SUCH DEPOSIT SUBSEQUENT TO RETIREMENT OR CESSATION OF EMPLOYMENT AND SUCH INTEREST INCOME IS CHARGEABLE TO TAX. THE TRUST HAS ALSO DULY DEDUCTED THE TAX OF RS. 59,931/- ON THE INTEREST INCOME U/S 194A OF THE ACT. RELIANCE IS PLACED ON THE JUDGMENT OF HON'BLE :- 4 -: ITAT, DELHI BENCH 'A' IN THE CASE OF ONGC LTD. V. ITO (TDS), DEHRADUN, 4 SOT 333 IN WHICH IT HAS BEEN HELD AS UNDER: 'PART A OF THE FOURTH SCHEDULE TO THE ACT PROVIDES THE RULES GOVERNING THE RECOGNISED PROVIDENT FUNDS. ADMITTEDLY, THE ASSESSES WAS A RECOGNISED PROVIDENT FUND. SECTION 10(12) PROVIDES THAT THE ACCUMULATED BALANCE DUE TO AN EMPLOYEE IS EXEMPT FROM TAX SUBJECT TO THE CONDITION THAT SUCH BALANCE CONFORMS TO THE EXTENT PROVIDED IN RULE 8 OF PART A OF THE FOURTH SCHEDULE. RULE 8 OF PART A OF THE FOURTH SCHEDULE PROVIDES THAT THE ACCUMULATED BALANCE DUE AND BECOMING PAYABLE TO AN EMPLOYEE PARTICIPATING IN A RECOGNIZED PROVIDENT FUND IS TO BE EXCLUDED FROM HIS TOTAL INCOME OF ANY OF THE THREE CONDITIONS ENUMERATED IN CLAUSES (I), (II) AND (III) THEREOF ARE FULFILLED. THE EXPRESSION THE ACCUMULATED BALANCE DUE' IS NOTEWORTHY AND HAVING REGARD TO THE DEFINITION OF THE EXPRESSION 'ACCUMULATED BALANCE DUE TO EMPLOYEES' AS PROVIDED IN RULE 2(F) OF PART A OF THE FOURTH SCHEDULE WHICH MEANS THE BALANCE DUE OR CLAIMABLE BY THE EMPLOYEE ON THE DAY HE CEASES TO BE AN EMPLOYEE OF THE EMPLOYER MAINTAINING THE FUND, IT CAN BE SAFELY DEDUCED THAT IT REFERS TO THE BALANCES IN THE ACCOUNT OF EMPLOYEES DURING THE CURRENCY OF THEIR EMPLOYMENT. IN THE INSTANT CASE, IT WAS AN ADMITTED POSITION THAT THE IMPUGNED CREDITS HAD BEEN MADE TO CONSTITUTE THE ACCUMULATED BALANCE DUE TO THE EMPLOYEE AFTER SUCH EMPLOYEES [MEMBERS] HAD CEASED TO BE THE EMPLOYEES OF THE ONGC, THE EMPLOYER, WHO WAS MAINTAINING THE ASSESSEE-FUND. EVEN CLAUSES (II) AND (III) OF RULE 8 OF PART A OF THE FOURTH SCHEDULE WHICH DEAL WITH CESSATION OR TERMINATION OF EMPLOYMENT DO NOT ENVISAGE THE PRESENT SITUATION. CLAUSE (II) PROVIDES THAT THE BENEFIT WOULD BE AVAILABLE IF THE SERVICES HAVE BEEN TERMINATED BY REASON OF THE EMPLOYEE'S ILL-HEALTH OR BY THE CONTRACTION OR DISCONTINUANCE OF THE EMPLOYEES BUSINESS OR FOR ANY OTHER REASON BEYOND THE CONTROL OF THE EMPLOYEE. SIMILARLY IN TERMS OF CLAUSE (III), SUCH ACCUMULATED BALANCE IS TO BE EXCLUDED IF ON THE CESSATION OF HIS EMPLOYMENT, THE EMPLOYEES OBTAIN EMPLOYMENT WITH ANY OTHER EMPLOYER AND THE ACCUMULATED, BALANCE DUE AND BECOMING PAYABLE TO SUCH EMPLOYEE IS TRANSFERRED IN THE RECOGNIZED PROVIDENT FUND MAINTAINED BY THE SUBSEQUENT EMPLOYER. THE ABOVE SITUATIONS, WHICH HAVE BEEN ENVISAGED UNDER RULE 8 OF :- 5 -: PART A OF THE FOURTH SCHEDULE WERE ADMITTEDLY NOT ATTRACTED IN THE INSTANT CASE. IN THE INSTANT CASE, THE CREDITS HAD BEEN MADE TO EMPLOYEES WHO HAD SINCE RETIRED OR IN OTHER WORDS HAD CEASED TO BE IN EMPLOYMENT. IT WAS ALSO NOT THE CASE OF THE ASSESSEE THAT THE CESSATION OF SUCH MEMBERS WAS ON ACCOUNT OF THEIR ILL-HEALTH OR BY CONTRACTION OR DISCONTINUANCE OF THE EMPLOYER'S BUSINESS OR FOR ANY OTHER CAUSE BEYOND THEIR CONTROL. FURTHER, THERE WAS ALSO NO CASE MADE OUT THAT ON THE CESSATION OF THE EMPLOYMENT WITH ONGC, SUCH RETIRING EMPLOYEES HAD OBTAINED EMPLOYMENT WITH ANY OTHER EMPLOYER AND THE ACCUMULATED BALANCES DUE AND BECOMING PAYABLE HAD BEEN TRANSFERRED TO ANOTHER PROVIDENT FUND. THEREFORE, THE INTEREST CREDITED BY THE ASSESSEE TO THE ACCOUNT OF SUCH PERSONS WOULD NOT FALL WITHIN THE PARAMETERS AS PROVIDED FOR IN RULE 8 OF PART A OF THE FOURTH SCHEDULE. IN OTHER WORDS, ON A COMBINED OPERATION OF SECTION 10(12) AND RULE 2(F) AND RULE 8 OF PART A OF THE FOURTH SCHEDULE, THE IMPUGNED AMOUNTS CREDITED IN THE ACCOUNT OF THE MEMBERS OF THE TRUST WHO HAD CEASED TO BE THE EMPLOYEES OF THE ONGC WERE NOT EXEMPTED FROM TAX. THEREFORE, THE ASSESSEE FUND WAS OBLIGED TO DEDUCT THE TAX AT SOURCE ON SUCH CREDITS.' IN VIEW OF THE ABOVE, I HOLD THAT THE ASSESSING OFFICER HAS RIGHTLY TAXED THE INTEREST OF RS.5,81,850/- AS INCOME OF THE APPELLANT. THE GROUNDS ARE DISMISSED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE WORD ACCUMULATED PROFIT GIVEN IN SECTION 10(12) OF THE ACT HAS BEEN DEFINED IN RULE 2(F) OF PART A OF THE FOURTH SCHEDULE. HE HAS FURTHER CONTENDED THAT RELAXATION WAS GIVEN IN RULE 5 (3) OF PART A OF THE FOURTH SCHEDULE, ACCORDING TO WHICH IF THE ACCUMULATED FUND IS NOT TAKEN BY THE EMPLOYEE AND IS ALLOWED TO BE RETAINED BY THE TRUST, THE INTEREST INCOME EARNED THEREON WOULD NOT BE TAXABLE. 5. THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THE ACCUMULATED BALANCE DUE TO AN EMPLOYEE MEANS THE BALANCE TO HIS CREDIT, OR SUCH PORTION THEREOF AS MAY BE CLAIMABLE BY HIM UNDER THE REGULATIONS OF THE :- 6 -: FUND, ON THE DAY HE CEASES TO BE AN EMPLOYEE OF THE EMPLOYER MAINTAINING THE FUND. THIS ENTIRE AMOUNT IS EXEMPTED FROM TAX ON THE DAY WHEN THE EMPLOYER CEASES TO BE AN EMPLOYEE OF THE EMPLOYER AND NOT THEREAFTER. THEREFORE, POST-RETIREMENT INTEREST ON THE ACCUMULATED FUND IS EXIGIBLE TO TAX. 6. HAVING GIVEN A THOUGHTFUL CONSIDERATION, WE HAVE CAREFULLY EXAMINED THE DEFINITION OF ACCUMULATED BALANCE DUE TO AN EMPLOYEE AND THE RELAXATION CLAUSES AND THE EXCLUSION CLAUSE I.E. RULES 5 AND 8 OF PART A OF THE FOURTH SCHEDULE OF THE INCOME-TAX ACT AND WE FIND THAT THE ACCUMULATED BALANCE DUE TO AN EMPLOYEE MEANS THE BALANCE TO HIS CREDIT, OR SUCH PORTION THEREOF AS MAY BE CLAIMABLE BY HIM UNDER THE REGULATIONS OF THE FUND, ON THE DAY HE CEASES TO BE AN EMPLOYEE OF THE EMPLOYER MAINTAINING THE FUND. THE CONDITION UNDER THE DEFINITION ACCUMULATED BALANCE DUE TO AN EMPLOYEE WAS NOT RELAXED IN RULE 5 OF PART A OF THE FOURTH SCHEDULE. THE RELAXATION WAS DONE WITH REGARD TO CLAUSE (E) AND CLAUSE (G); WHEREAS THE ACCUMULATED BALANCE DUE TO AN EMPLOYEE WAS REFERRED IN CLAUSE (F). THEREFORE, THE ALLEGED RELAXATION IS NOT APPLICABLE TO THE ACCUMULATED BALANCE DUE TO AN EMPLOYEE. MOREOVER, RULE 8 OF PART A OF THE FOURTH SCHEDULE ALSO TALKS ABOUT THE ACCUMULATED BALANCE DUE AND BECOME PAYABLE TO AN EMPLOYEE WHILE EXCLUDING IT FROM THE COMPUTATION OF THE TOTAL INCOME OF THE EMPLOYEE. FOR THE SAKE OF REFERENCE, WE EXTRACT CLAUSE (F) OF RULE 2; SUB-RULE (3) OF RULE 5 AND RULE 8 OF PART A OF THE FOURTH SCHEDULE AS UNDER:- RULE 2 (F) OF PART A OF THE FOURTH SCHEDULE: 2. DEFINITIONS.--IN THIS PART, UNLESS THE CONTEXT OTHERWISE REQUIRES,-- (F) 'ACCUMULATED BALANCE DUE TO AN EMPLOYEE' MEANS THE BALANCE TO HIS CREDIT , OR SUCH PORTION THEREOF AS MAY BE CLAIMABLE BY HIM UNDER THE REGULATIONS OF THE FUND, ON THE DAY HE CEASES TO BE AN EMPLOYEE OF THE EMPLOYER MAINTAINING THE FUND; :- 7 -: RULE 5 (3) OF PART A OF THE FOURTH SCHEDULE: 5. RELAXATION OF CONDITIONS.--(1) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (A) OF RULE 4 THE COMMISSIONER MAY, IF HE THINKS FIT, AND SUBJECT TO SUCH CONDITIONS, IF ANY, AS HE THINKS PROPER TO ATTACH TO THE RECOGNITION, ACCORD RECOGNITION TO A FUND MAINTAINED BY AN EMPLOYER WHOSE PRINCIPAL PLACE OF BUSINESS IS NOT IN INDIA, PROVIDED THE PROPORTION OF EMPLOYEES EMPLOYED OUTSIDE INDIA DOES NOT EXCEED TEN PER CENT. (3) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (E) OR CLAUSE (G) OF RULE 4,-- (A) AT THE REQUEST MADE IN WRITING BY THE EMPLOYEE WHO CEASES TO BE AN EMPLOYEE OF THE EMPLOYER MAINTAINING THE FUND, THE TRUSTEES OF THE FUND MAY CONSENT TO RETAIN THE WHOLE OR ANY PART OF THE ACCUMULATED BALANCE DUE TO THE EMPLOYEE TO BE DRAWN BY HIM AT ANY TIME ON DEMAND; (B) WHERE THE ACCUMULATED BALANCE DUE TO AN EMPLOYEE WHO HAS CEASED TO BE AN EMPLOYEE IS RETAINED IN THE FUND IN ACCORDANCE WITH THE PRECEDING CLAUSE, THE FUND MAY CONSIST ALSO OF INTEREST IN RESPECT OF SUCH ACCUMULATED BALANCE. RULE 8 OF PART A OF THE FOURTH SCHEDULE: 8. EXCLUSION FROM TOTAL INCOME OF ACCUMULATED BALANCE.--THE ACCUMULATED BALANCE DUE AND BECOMING PAYABLE TO AN EMPLOYEE PARTICIPATING IN A RECOGNISED PROVIDENT FUND SHALL BE EXCLUDED FROM THE COMPUTATION OF HIS TOTAL INCOME-- (I) IF HE HAS RENDERED CONTINUOUS SERVICE WITH HIS EMPLOYER FOR A PERIOD OF FIVE YEARS OR MORE, OR (II) IF, THOUGH HE HAS NOT RENDERED SUCH CONTINUOUS SERVICE, THE SERVICE HAS BEEN TERMINATED BY REASON OF THE EMPLOYEE'S ILL-HEALTH, OR BY THE CONTRACTION OR DISCONTINUANCE OF THE EMPLOYER'S BUSINESS OR OTHER CAUSE BEYOND THE CONTROL OF THE EMPLOYEE, [OR] :- 8 -: (III) IF, ON THE CESSATION OF HIS EMPLOYMENT, THE EMPLOYEE OBTAINS EMPLOYMENT WITH ANY OTHER EMPLOYER, TO THE EXTENT THE ACCUMULATED BALANCE DUE AND BECOMING PAYABLE TO HIM IS TRANSFERRED TO HIS INDIVIDUAL ACCOUNT IN ANY RECOGNIZED PROVIDENT FUND MAINTAINED BY SUCH OTHER EMPLOYER. 7. HAVING CAREFULLY EXAMINED THE AFORESAID RELEVANT PROVISIONS OF THE ACT, WE ARE OF THE VIEW THAT INTEREST EARNED ON THE ACCUMULATED FUND RETAINED WITH THE TRUST AFTER RETIREMENT IS EXIGIBLE TO TAX. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND WE ACCORDINGLY CONFIRM THE SAME. 8. APROPOS GROUND NO.2, IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED THAT THE ASSESSING OFFICER HAS TAKEN THE RENT RECEIVED FOR 12 MONTHS @ RS.22,500/- PER MONTH WHILE COMPUTING THE INCOME FROM HOUSE PROPERTY; WHEREAS THE PROPERTY REMAINED VACANT FROM 1.1.2010 TO 31.3.2010 AND IT WAS ONLY ON RENT FOR NINE MONTHS. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THIS EXPLANATION OF THE ASSESSEE AND HE HAS TAKEN THE RENT FOR THE WHOLE YEAR. 9. BEFORE THE LD. CIT(A), ASSESSEE HAS REITERATED HIS CONTENTIONS, BUT FINDING NO FORCE IN THE CONTENTIONS OF THE ASSESSEE IN THE LIGHT OF TDS CERTIFICATE ISSUED BY THE ASSESSEE, HE CONFIRMED THE ADDITION. 10. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AND REITERATED HIS CONTENTIONS. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RENT AGREEMENT IN SUPPORT OF HIS CONTENTION BUT FROM A PERUSAL OF THE RENT AGREEMENT, IT IS NOTICED THAT THE RENT AGREEMENT WAS EXECUTED IN 2007; THEREAFTER IT WAS CONTINUED TO BE IN FAVOUR OF THE SAME TENANT. AS PER THIS AGREEMENT, THE ASSESSEE HAS TAKEN ADVANCE OF RS.50,000/- AS SECURITY WHICH WAS TO BE REFUNDED AT THE TIME OF VACATION OF THE HOUSE. THOUGH THE ASSESSEE HAS CLAIMED THAT THE PROPERTY WAS VACATED ON :- 9 -: 31.12.2009 AND PROPERTY REMAINED VACATED FROM 1.1.2010 TO 31.3.2010, BUT NO EVIDENCE IN SUPPORT OF THIS CONTENTION WAS FILED. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, HAS ADMITTED DURING THE COURSE OF HEARING THAT SECURITY OF RS.50,000/- WAS REFUNDED TO THE TENANT IN THE NEXT FINANCIAL YEAR. IN THE LIGHT OF THESE FACTS, THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED THAT THE PROPERTY REMAINED VACANT FOR THREE MONTHS W.E.F. 1.1.2010 TO 31.3.2010, AS NO PRUDENT MAN CAN ACCEPT THE CONTENTION THAT EVEN AFTER VACATING THE PROPERTY, THE TENANT WOULD AGREE TO RECEIVE SECURITY DEPOSIT AFTER 3-4 MONTHS. IN THE LIGHT OF THESE FACTS, WE FIND NO MERIT IN THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A). 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:27 TH NOVEMBER, 2014 JJ:1811 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR