Shri Hemanshu Anantprasad Buch, RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Circle-4, RAJKOT-GUJARAT

ITA 371/RJT/2012

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0204 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 06-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: D M RINDHANI
• Keywords: Wrong claim
• Section: 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAV A, AM ITA NO.371/RJT/2012. / ASSESSMENT YEAR 2007-08 SHRI HEMANSHU ANANTPRASAD BUCH, BLOCK NO.14, KUMKUM PARK-2, B/H PUSHKARDHAM TEMPLE, UNIVERSITY ROAD, RAJKOT-360005 PAN: ABZPM9468M ( * / APPELLANT) VS. ACIT, CIRCLE-4, AMRUTA ESTATE, M G ROAD, RAJKOT-360001. +,* / RESPONDENT -. / ASSESSEE BY SHRI D.M.RINDHANI . / REVENUE BY SHRI. M.K.SINGH . / DATE OF HEARING 11.9.2012 . / DATE OF PRONOUNCEMENT 14.09.2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 29.3.2012 OF CIT(A), RAJKOT FOR THE ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER : 1. THE LD.C.I.T.(A) ERRED IN UPHOLDING THE ACTIO N OF ITO IN ISSUING NOTICE U/S 148 OF THE ACT. 2. THE LD.C.I.T.(A) ERRED IN SUSTAINING THE ADDITIO N OF RS.5,00,000/- BY REJECTING THE CLAIM OF EXEMPTION U/ S . 10(10C) OF THE ACT IN RESPECT OF THE AMOUNT RECEIVED BY THE APPE LLANT UNDER STATE BANK OF INDIA EXIT OPTION SCHEME. ITA NO.371/RJT/2012. 2 3. ALTERNATIVELY AND WITHOUT PREJUDICE TO GROUND NO. 2, THE AO ERRED IN NOT GRANTING BENEFIT U/S 89(1) OF THE ACT I N RESPECT OF IMPUGNED AMOUNT RECEIVED BY THE APPELLANT. 3. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUNDS NO.1 AND 3 FOR WHICH THE LD.DR HAS NOT RAISED ANY SERIOUS OBJECTION. WE, THEREFORE, DISMISS GROUND NO.1 BEING NOT PRESSED. 4. BRIEF FACTS RELATING TO THE CONTROVERSY INVOLVED IN GROUND NO. 2 ARE THAT THE ASSESSEE WAS AN EX-EMPLOYEE OF STATE BANK OF INDIA. HE OBTAINED THE VOLUNTARY RETIREMENT UNDER EXIT OPTION SCHEME OF THE BANK. OUT OF THE BENEFIT GAINED BY HIM, HE CLAIMED D EDUCTION IN RESPECT OF RS.5 LAKHS U/S 10(10C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). HE FILED RETURN OF INCOME ON 23.10.2007 DECLAR ING TOTAL INCOME OF RS.1,76,060/-. IN THE SAID RETURN THE ASSESSEE CLAIMED EX EMPTION OF RS.5,00,000/- U/S 10(10C). THE RETURN WAS PROCESSED U/S 14 3(1) OF THE INCOME TAX ACT 1961 WITHOUT MAKING ANY PRIMA-FACIE ADJU STMENTS. THE ASSESSMENT WAS RE-OPENED U/S 147 R.W.S. 148 ON THE GROUND THAT THE ASSESSEE HAS MADE WRONG CLAIM OF RS.5,00,000/- U/S 10(10C ) OF THE ACT. THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO WHY TH E CLAIM OF EXEMPTION U/S 10(10C) SHOULD NOT BE REJECTED AND THE A MOUNT OF EX-GRATIA PAYMENT OF RS.5,00,000/- BE NOT ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN REPLY, THE ASSESSEE SUBMITTED HIS REPLY DATE D 12.4.2010 STATING THEREIN THAT THE RETURN FILED ON 23.10.2007 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. AGAIN, THE AO ISSUED NOTICES U/S 143(1) AND 142(1), AND IN COMPLIANC E WITH THESE NOTICES, THE ASSESSEE FILED WRITTEN SUBMISSIONS ON 29.10.201 0. IN SUPPORT OF HIS CLAIM HE RELIED ON THE DECISION OF THE HONBLE K ARNATAKA HIGH COURT ITA NO.371/RJT/2012. 3 IN THE CASE OF K ANBALAKAN V/S SBI AND THE DECISION OF THE RAJKOT TRIBUNAL IN THE CASE OF SHRI YUSUFBHAI R GAZIYANI V/ S CIT-III, RAJKOT AY- 2006-07 CIT(A)/0330/-08-09 DATED 20.1.2009. THE A O DID NOT ACCEPT THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT I N THE CASE OF K ANBALAKAN V/S SBI ON THE GROUND THAT THE JUDGMENT PERTAINS TO TDS. THE AO AFTER RELYING ON THE VARIOUS CBDT CIRCULARS, CASE LAW AND CIT(A)S ORDER MENTIONED IN ASSESSMENT ORDER AT PAGES 2 TO 4 INCLU DING THE DECISION IN THE CASE OF CIT V/S SHRI VENJKETESAN, TAX CA SE APPEAL NO.330 OF 2008, TIOL-335-HC.MAD-IT DATED 4.7.2008, WHEREIN IT HAS BEEN HELD THAT THE PROVISIONS OF SECTION 10(10C) AND R ULE 2BA SHOULD BE COMPILED BY CUMULATIVELY AND COMPLIANCE OF SOME OF THEM WOULD NOT ENTITLE THE EMPLOYEE THE BENEFIT CLAIMED FOR, REJECT ED THE CLAIM OF RS.5,00,000/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED THE FA CTS OF THE CASE AND RELIED ON VARIOUS DECISIONS. THE SUBMISSIONS OF THE ASSE SSEE IS FORMING PART OF THE CIT(A)S ORDER FROM PAGES 2 TO 5 AND OBSERVATIONS OF THE LD. CIT(A) IS FORMING PART OF HIS ORDER FROM PAG ES 6 TO 11. THE LD. CIT(A) AFTER DISCUSSING DETAILED SUBMISSIONS OF THE ASSESSEE, REASONS GIVEN BY THE AO CONFIRMED THE ACTION OF THE AO IN RE JECTING THE CLAIM OF EXEMPTION U/S 10(10C) AND MAKING THE ADDITION OF RS.5, 00,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE APPEARED ON BEHALF OF THE ASSESSEE AND POINTED OUT THAT THE ISSU E RAISED IN THE ITA NO.371/RJT/2012. 4 GROUND NO.1 STANDS COVERED BY THE DECISION OF THE RA JKOT BENCH OF THE TRIBUNAL IN THE GROUP CASES OF (1) DILIPSINH J. BHATTI , (2) HARSUKHLAL K. GHETIA, (3) SHRI MANOJBHAI L. SANGADIA, AND (4) SHR I CHUNILAL P. BHIMJIYANI, VS. THE A.C.I.T., IN ITA NOS.ITA 1269 TO 1272-RJT-2010.(A.Y. 2007-08) DATED 22.12.2011 AND SUBMITTED THAT THE FA CTS OF THE CASE IN HAND AND RELIED ON BY THE ASSESSEE ARE SIMILAR AND HENCE THE ISSUE RAISED IN THE APPEAL BE DECIDED IN FAVOUR OF THE ASSESSEE AND DIRECT THE AO TO ALLOW BENEFIT U/S 10(10C) TO THE ASSESSEE. 8. ON THE OTHER HAND, SHRI. M.K.SINGH, LD.DR COULD N OT CONTROVERT THE AFORESAID SUBMISSION MADE BY THE LD.COUNSEL FOR THE ASS ESSEE. 9. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE AO IN THE ASSESSMENT ORDER DISALLOWED THE DEDUCTION OF CLAIM U/S 1 0(10C) OF THE ACT. 10. THUS LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE DECISION OF THE RAJKOT BENCH OF THE TRIBUNAL I N THE GROUP CASES OF (1) DILIPSINH J. BHATTI, (2) HARSUKHLAL K. GHETIA, (3) SHRI MANOJBHAI L. SANGADIA, AND (4) SHRI CHUNILAL P. BHIMJIYANI, VS. T HE A.C.I.T (SUPRA), WE FIND THAT THE ISSUE RAISED IN THIS APPEAL STANDS COVER ED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE OBSERVATIONS RECORDED BY THE TRIBUNAL IN THE AFORESAID ORDER IN PARAGRAPHS 4 TO 5 ARE REPRODUCED BELOW: 4. AT THE OUTSET, THE LEARNED REPRESENTATIVES OF TH E PARTIES SUBMITTED THAT THIS ISSUE IS COVERED BY VARIOUS DECISIONS OF ITAT INCLUDING DECISION OF ITAT, RAJKOT BENCH ITA NO.659/RJT/ 2010 ORDER DATED 11-06-2010. THE RELEVANT FINDINGS OF THE ITAT ARE REPRODUCED AS BELOW:- ITA NO.371/RJT/2012. 5 5.0 WE HAVE HEARD THE RIVAL CONTENTIONS. WE FIND TH AT HONBLE MADRAS HIGH COURT HAS RECENTLY DECIDED IDENTICAL ISSUE IN THE CASE OF SARANAYAKI KANNAN VS. CIT(2010) 38 DTR (MAD) 24. RELEVANT PORTION OF THE SAID JUDGMENT IS REPRODUCED HEREUNDER: 3. THE LEARNED COUNSEL FOR THE ASSESSEE AS WELL AS THE REVENUE SUBMITTED THAT THE ISSUE IS NOW SQUARELY COVERE D BY THE JUDGMENT OF THE SUPREME COURT MADE IN CIVIL APPEAL NOS.6997 TO 7002 OF 2009 (CHANDRA RANGANATHAN & ORS VS. CIT] DT. 21ST OCT., 2009. IT HAS ALSO TAKEN NOTE OF THE CIRCULAR ISSUED BY THE CBDT. IN THE SAID JUDGMENT THE SUPREME COURT HAS OBSERVED AS FO LLOWS: DURING THE COURSE OF HEARING OF THESE APPEALS, IT WA S BROUGHT TO OUR NOTICE THAT BY THE SUBSEQUENT LETTER DT . 8TH MAY, 2009, ISSUED BY THE CBDT. IT WAS INDICATED THAT TH E MATTER HAD BEEN REVIEWED ON THE BASIS OF THE JUDGMENT OF THE BOMBAY HIGH COURT DT 4TH JULY, 2008 IN THE CASE OF CIT VS KOODATHIL KALLYATAN AMBUJAKSHAN (2008) 219 CTR (BOM ) 80 : (2008) 12 DTR (BOM) 138 AND IT WAS HELD THAT AM OUNTS RECEIVED BY RETIRING EMPLOYEES OF THE RBI WOULD BE E LIGIBLE FOR EXEMPTION UNDER THE AFORESAID PROVISIONS OF THE I T ACT. ON BEHALF OF THE UNION OF INDIA AND THE CIT, THE RE SPONDENT HEREIN, IT WAS SUBMITTED THAT IN VIEW OF THE SAID CIRCU LAR, THE RESPONDENT WOULD ALLOW THE BENEFIT OF DEDUCTION TO TH E APPELLANTS UNDER S. 10(10C) OF THE IT ACT 1961 AS FAR AS THE RETIRED EMPLOYEES OF THE RBI ARE CONCERNED. 4. THE CIRCULAR OF THE CBDT READS AS FOLLOWS: IT HAS NOW BEEN BROUGHT TO THE NOTICE OF THE BOARD THAT THE HONBLE HIGH COURT OF BOMBAY VIDE ITS ORDER DT. 4TH JULY 2008 IN THE CASE OF CIT VS. KOODATHIL KALLYATAN AMBUJAKSHAN (2008) 219 CTR (BOM) 80 : (2008) 12 DTR (BOM) 138 HAS HELD THAT OERS OF FRBI SATISFIES ALL THE CONDITIONS OF R.2BA AND AMOUNTS RECEIVED BY RETIRING EMPLOYEES THEREUNDER WERE ELIGIBLE FOR EXEMPTION UND ER S. 10(10C). THAT JUDGMENT HAS BECOME FINAL. 5. THUS LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE ABOVE DECISIONS AND CBDT CIRCULAR WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION UNDER S. 10(10C) OF THE IT ACT. THIS GROUND OF THE ASSESSEE IS ALLOWED. 5. SINCE FACTS ARE IDENTICAL TO THE ABOVE CASE DECIDED BY ITAT, WE RESPECTFULLY FOLLOW THE ABOVE ORDER OF THE ITAT. W E ALLOW THE GROUND OF APPEAL RAISED BY THE ASSESSEE. ITA NO.371/RJT/2012. 6 11. RESPECTFULLY FOLLOWING THE DECISION OF THE RAJKOT BE NCH OF THE TRIBUNAL IN THE GROUP CASES OF (1) DILIPSINH J. BHATTI, (2) HARSUKHLAL K. GHETIA, (3) SHRI MANOJBHAI L. SANGADIA, AND (4) SHR I CHUNILAL P. BHIMJIYANI, VS. THE A.C.I.T (SUPRA), WE SET ASIDE THE O RDER OF THE LD.CIT(A) AND DIRECT THE AO TO ALLOW EXEMPTION U/S 10(10C) OF THE ACT AND DELETE THE ADDITION OF RS.5,00,000/- FOR WANT OF EXEMPTION U/S 10(10C). 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED HEREINABOVE. SD SD ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 14.09.2012 /RAJKOT SRL . .. . +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-, 2. +,* / RESPONDENT- 3. : / CONCERNED CIT. 4. :- / CIT (A). 5. 4 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.