Soniya Priyadarshini Mishra, Cuttack V. ITO, Cuttack

ITA 400/CTK/2011

• Counselvise Citation: 40022114 RSA 2011
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 23-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 13-09-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: S K JETHI

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, (SMC) BENCH, CUTTACK BEFORE : SHRI K.S.S.PRASAD RAO, JM ITA NO. 400/CTK/2011 (ASSESSMENT YEAR 2007 - 08) SONIYA PRIYADARSHINI MISHRA, SATYANIVAS,MADHUPATNA, CUTTACK PAN:AKQPM 0024 Q VERSUS INCOME - TAX OFFICER, WARD 2( 2), CUTTACK. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.K.JETHI, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 23.12.2011 DATE OF PRONOUNCEMENT : 13.01.2012 ORDER SHRI K.S.S.PRASAD RAO, JM : THIS APPEAL IS FILED BY TH E ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED CITA) DT. 23.5.2011 FOR THE ASSESSMENT YEAR 2007 - 08 IN THE CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN HER GROUNDS OF APPEAL. 1. THAT NEITHER THE AO NOR THE LEARNED CIT(A) PAID ANY ATTENTION TO RELIEF CLAIMED FROM HOUSE RENT RECEIPT AND GROUNDS OF APPEAL RESPECTIVELY. 2. THAT THE APPELLANT ALLOWED STATUTORY DEDUCTION AMOUNTING TO 57,437 AS 30% OF THE TOTAL RENT RECEIPT NEITHER THE I.T.O. NOR THE LEARNED CIT(A) CONSIDERED THE MATTER AS SUCH DID NOT ALLOW THE DEDUCTION OF 30% OF TOTAL RECEIPT WITHOUT MAINTAINING ANY REASON I.E., REMAIN COMPLETELY SILENT ABOUT THE MATTER. 3. THE LE ARNED CIT(A) DISCUSSED ABOUT 67,328 (30% STATUTORY DEDUCTION 57,437 LIP 9,891 U/S.80C). 5. THAT DISALLOWANCE OF STATUTORY DEDUCTION AND DEDUCTION U/S.80C WITHOUT ANY REASON IS ILLEGAL, ARBITRARY AND NOT MAINTAINABLE IN EYE OF LAW. ITA NO.40 0/CTK/2011 2 3. BOTH THE P ARTIES WERE HEARD REGARDING THE ISSUES RAISED IN THE APPEAL AND THEIR LEGAL IMPLICATIONS. 4. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS STATED THAT RELIEF U/S.80C WAS GIVEN BY THE ASSESSING OFFICER ON MOVING PETITION U/S.154 OF THE I. T.ACT. HENCE, THE ISSUE RELATING TO THIS ASPECT BECOMES INFRUCTUOUS. 5. ON CAREFUL CONSIDERATION OF THE MATERIAL AVAILABLE BEFORE THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF RIVAL SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO TH E ISSUES ARE THAT THE ASSESSEE DERIVES INCOME FROM HOUSE PROPERTY, TUITION AND SALARY FROM M/S.SARALA MEDICAL STORE. SHE FILED HER RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 7.12.2007 DISCLOSING TOTAL INCOME OF 1,13,172. INITIALLY THE SAID RET URN WAS PROCESSED U/S.143(1). LATER ON THE ASSESSMENT WAS REOPENED ON THE BASIS OF AIR INFORMATION RECEIVED FROM CIT(C.I.B.),BHUBANESWAR. ON VERIFICATION OF THE BOOKS OF ACCOUNT AND OTHER DETAILS PRODUCED, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HA S CREDITED AN AMOUNT OF 1,80,500 IN HER CAPITAL ACCOUNT AS PROFIT DURING THE YEAR. BUT AS PER THE STATEMENT OF INCOME ENCLOSED TO THE RETURN OF INCOME, NET INCOME AFTER ALL EXPENSES WAS SHOWN AT 1,13,172. THEREFORE, SHOW CAUSE NOTICE WAS ISSUED ON 20.10.2009. AFTER RECEIVING EXPLANATION OF THE ASSESSEE, THE ASSESSING OFFICER CONSIDERED THE SAME AND CAME TO THE CONCLUSION THAT EXCESS AMOUNT OF 67,328 (I.E, 1,80,500 1,13,172) REFLECTED CAPITAL ACCOUNT IS THE INCOME OF THE ASSESSEE. ACCORDINGLY, HE ADDED THIS AMOUNT TO THE RETURNED INCOME. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LEARNED CIT(A) AND IS UNSUCCESSFUL AND HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AS CAN BE SEEN FROM THE COMPUTATION STATEMENT MADE AVAILABLE BY THE ASSESSEE TO THE TRIBUNA L, IT IS FOUND THAT THE ASSESSEE HAS SHOWN GROSS ITA NO.40 0/CTK/2011 3 RECEIPTS OF 1,80,500 AND DEDUCTED THERE FROM 30% OF THE TOTAL GROSS RECEIPTS U/S.24 OF THE I.T.ACT, WHICH IS A STATUTORY DEDUCTION UNDER LAW EVEN THOUGH THE ASSESSEE HAS NOT INCURRED ANY SUCH EXPENDITURE AND ALSO CLAIMED DEDUCTION LIC PREMIUM OF 8,891 AND THE NET RESULTED FIGURE COMES TO 1,13,172 WHICH WAS SHOWN AS INCOME FOR TAXATION BY THE ASSESSEE. BUT AT THE SAME TIME, THE ASSESSEE HAS ADDED THE SUM OF 1,80,500 TO HER CAPITAL ACCOUNT AS INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THUS , THE ASSESSING OFFICER HAS HELD THAT THERE IS EXCESS CREDIT SHOWN IN THE LIABILITIES SIDE OF THE BALANCE SHEET AND TAXED THE SAME. BUT HE HAS NOT AT ALL CONSIDERED THE CLAIM OF THE ASSESSEE AS PER THE STATEMENT OF INCOME CLAIMED BY THE ASSESSEE. THE CLAIM OF STATUTORY D EDUCTION PROVIDED U/S.24 OF THE I.T.A CT OUT OF RENTAL INCOME RECEIVED BY THE ASSESSEE AND HAS ALSO NOT CONSIDERED THE DEDUCTION U/S.80C OF THE I.T.ACT TOWARDS LIC PREMIUM DURING THE PERIOD . THE LEARNED CIT(A) HAS UPHELD THIS WITHOUT CONSIDERING THIS O MISSI ONS MADE BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS HIMSELF RECTIFIED THE MISTAKE BY ALLOWING DEDUCTION U/S.80C IN HIS ORDER U/S.154 . NOW THE ISSUE REMAINS IS STATUTORY DEDUCTION PROVIDED U/S.24 OF THE I.T.ACT FOR EXPENDITURE TOWARDS REPAIRS ETC., ALLOWABLE OUT OF THE RENTAL INCOME RECEIVED BY THE ASSESSEE. IT IS UNDISPUTED THAT THIS IS A STATUTORY ALLOWANCE AVAILABLE TO THE ASSESSEE EVEN THOUGH SHE HAS NOT INCURRED ANY EXPENDITURE UNDER THIS HEAD. THEREFORE, THE ASSESSEE IS ENTITLED TO ADD TH IS AMOUNT TO HER CAPITAL ACCOUNT. IN SUCH VIEW OF THE MATTER, THE EXCESS LIABILITY SHOWN IN THE BALANCE SHEET IS NOT LEVIABLE TO TAX. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) OF THE SAID EXPENDITURE OF 5 7,437 BEING30% OF THE GROSS RECEIPT OF RENTAL INCOME BY THE ASSESSEE DURING THE ASSESSMENT YEAR UNDER CONSIDERATION IS HEREBY DELETED BY ALLOWING THE APPEAL OF THE ASSESSEE. ITA NO.40 0/CTK/2011 4 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. S D/ - S D/ - ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 13.01.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SONIYA PRIYADARSHINI MISHRA, SATYANIVAS,MADHUPATNA, CUTTACK 2. TH E RESPONDENT: INCOME - TAX OFFICER, WARD 2(2), CUTTACK. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.