Debasis Mishra, Cuttack V. ITO, Cuttack

ITA 408/CTK/2011

• Counselvise Citation: 40822114 RSA 2011
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 27-09-2011
• Court: TRIBUNAL
• Department Lawyers: S K MOHANTY
• Assessee Lawyers: S K JETHI
• Keywords: Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM, AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 408/CTK /2011 (ASSESSMENT YEAR 2006 - 07) DEBASIS MISHRA, SATYANIVAS, MADHUPATNA, P.O.KALYANI NAGAR, CUTTACK 753 013, ODISHA P AN: AJFPM 3062 L VERSUS INCOME - TAX OFFICER, WARD 2(2), CUTTACK. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.K.JETHI, AR FOR THE RESPONDENT SHRI S.K.MOHANTY, DR DATE OF HEARING : 20.12.2011 DATE OF PRONOUNCEMENT : 13.01.2012 ORDER SHRI K.K.GUPTA, AM : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) CONFIRMING THE ADDITIONS/DISALLOWANCES MADE BY THE ASSESSING OFFICER ON TWO ISSUES BEING THE SHARE OF INTEREST ON HOUSING LOAN OBTAINE D BY THE FOUR CO - OWNERS ON ERRONEOUS FINDINGS BY IDENTIFYING DISALLOWABLE AMOUNT OF 19,610 AS INTEREST. THE ASSESSEE IS A LSO IN APPEAL ON THE TAXATION OF WITHDRAWALS FROM BANK ACCOUNT CONSIDERED FOR THE PURPOSE OF LOW WITHDRAWAL FOR HOUSE - HOLD EXPENSES. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE DERIVES INCOME FROM SALARY AND HOUSE PROPERT Y AND WAS SUBJECTED TO ASSESSMENT U/SS.143(3)/147 WHEN THE ASSESSEE WAS TO EXPLAIN THE AMOUNT INVESTED IN THE PURCHASE OF PROPERTY ALONG WITH THREE OTHER CO - OWNERS AMOUNTING TO 40 LAKHS. THE ASSESSING OFFICER VERIFIED THE CLAIM OF INTEREST PAID ON THE BOR ROWINGS FOR THE INVESTMENT IN THE PROPERTY WHEN THE ASSESSEE SUBMITTED THAT THE TOTAL AMOUNT OF 10,65,121 PAID TO FOUR BANKS AS INTEREST ON BORROWINGS FOR THE PURCHASE OF HOUSE PROPERTY WAS SHARED EQUALLY BY THE FOUR CO - OWNERS LEADING ITA NO.408/CT K/2011 2 TO ASSESSEES CLAIM OF 2,66,280 WHICH WAS PARTLY DENIED BY THE ASSESSING OFFICER AMOUNTING TO 19,610 WHEN THE ASSESSING OFFICER HELD A VIEW THAT BANK OF INDIA LOAN OF WHICH INTEREST AMOUNTING TO 42,020 WAS CLAIMED OBTAINED BY SHRI MANMOHAN MISHRA AND SMT. MANORAMA MISHRA ONE OF THE CO - OWNERS WAS NOT SETTLED FOR THE IMPUGNED PROPERTY. HE FURTHER VERIFIED THE LOW DRAWINGS WHEN HE PROPOSED TO TAX THE AMOUNT WITHDRAWN FROM THE AUTOMATIC T ELLOR MACHINE OF AXIX BANK AND ALSO USE OF ATM CARD FOR PAYMENT OF 16,000. THE CASH WITHD RAWAL OF 35,000 AND 16,000 WERE HELD AS EXPENDITURES U/S.69C FOR TAXATION BY THE ASSESSING OFFICER. AGGRIEVED, BOTH THE ISSUES WERE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY WHO CONFIRMED THE SAME. 3. THE LEARNED COUNSEL FOR THE ASSESSEE INITIATING H IS ARGUMENTS SUB MITTED THAT THE LEARNED CIT(A) HAS CONFIRMED THE SAME WITHOUT EVEN APPLYING MIND TO THE FACTS FOR INTERPRETATION WHICH HAVE BEEN WRONGLY CONSTRUED BY THE ASSESSING OFFICER INSOFAR AS ON VERIFICATION FOR THE LOW DRAWINGS WHEN HE WAS EXPLAIN ED THE WITHDRAWAL FROM ATM AND USE OF CARD THE AMOUNT OF 51,000 WAS TAXED U/S.69C FOR HOUSE HOLD EXPENSES. HAVING ASSESSED INCOME OF SALARY OF 1,44,402 IT WAS NOBODYS CASE THAT THE WITHDRAWALS FROM THE BANK CAN BE TAXED AS EXPENDITURE U/S.69C. THE LEARNED CIT(A) THEREFORE DID NOT EVEN GIVEN A FINDING TO JUSTI FY THE ILLOGICAL CONCLUSION S AS MADE BY THE ASSESSING OFFICER WHEN HE CONFIRMED THE SAME. WITH RESPECT TO THE EARLIER ISSUE OF SHARE OF INTEREST TO BE ALLOWED AS CLAIMED IN THE RETURN, THE ASSESSING OFFICERS CONTENTION FOR DISALLOWING 19,610 WAS ON THE P REMISE THAT ONE OF THE CO - OWNERS HAD OBTAINED THE LOAN FOR ANOTHER PROPERTY AND NOT THE SAME PROPERTY WHICH WAS TO BEAR INTEREST. THE INTEREST PORTION FOR THIS PROPERTY WAS ONLY 42,020 WHICH HE HAS ALLOWED IN AN APPEAL I N THE CASE OF MANMOHAN MISHRA AND S MT. MONORAMA MISHRA AS ELIGIBLE DEDUCTION U/S.24(B). IN ANY CASE, THE DISALLOWANCE OF 19,610 BY THE ASSESSING OFFICER OUGHT NOT ITA NO.408/CT K/2011 3 HAVE BEEN CONFIRMED BY THE LEARNED CIT(A) FOR THE SIMPLE REASON THAT THE LOAN OBTAINED FOR THIS PARTICULAR PROPERTY HAD BEEN E STABLISHED AMONGST THESE CO - OWNERS THEREFORE WAS TO BE SHARED EQUALLY AMONGST THEM , COULD NOT HAVE RESULTED IN AN ARTIFICIAL DIFFERENCE OF 19,610 WHICH WAS PART OF HAVING PAID THE TOTAL OF 10,65,121 BY ALL THE FOUR CO - OWNERS HAD BEEN ACCEPTED IN RESPECT OF OTHERS. THE ASSESSEES SHARE BEING 2,66,280 THEREFORE COULD NOT BE DENIED AND THAT TOO JUST BECAUSE THE OTHER CO - OWNER ALSO OWNS ANOTHER PROPERTY WHICH MAY NOT BEEN CLAIMED FOR DEDUCTION UNDER THE PROVISIONS OF SECTION 24(B) BY THE RESPECTIVE ASSESS EES. HE PRAYED THEREFORE, THAT BOTH THESE ADDITIONS/ DISALLOWANCE MAY BE DIRECTED TO BE DELETED. 4. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE ASSESSING OFFICER IN HIS ORDER HAS CATEGORICALLY GIVEN A FINDING THAT TH E INTEREST AMOUNTING TO 42,020 PAID BY SHRI MANMOHAN MISHRA AND SMT. MANORAMA MISHRA WAS NOT FOR THE SCHEDULED PROPERTY WHEN THE CLAIM OF INTEREST WAS CLAIMED U/S.24(B) IN EXCESS AMOUNTING TO 37,057 IN THE CASE OF THE ASSESSEE. WITH RESPECT TO THE WITHDRAWAL FROM ATM, HE SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW FOR HIS PART SUBMISSIONS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO HOLD THAT THE AUTHORITIES BELOW HAVE NOT J USTIFIED THEIR SUSTAINING THE ADDITIONS/DISALLOWANCE INSOFAR AS THE FACTS AND FIGURES INDICATE THAT THE ASSESSEE COULD NOT BE SUBJECTED TO ADDITION/DISALLOWANCE IN THE ASSESSMENT. FOUR CO - OWNERS HAVE SHARED THE INTEREST TO BE BORNE BY THEM EQUALLY ON THE PROPERTY PURCHASED WHICH WAS PAID FOR AGAINST BANK LOAN S . THE ASSESSING OFFICER HAVING SATISFIED THAT THE PURCHASE WAS PROPER INSOFAR AS THE BANK WAS SATISFIED TO GRANT LOAN HAD CHARGED INTEREST WHICH WAS CLAIMED AS EQUAL SHARE OF DEDUCTION UNDER THE PROVI SIONS OF SECTION 24(B) TO PASS THE ORDER U/S.147 . ITA NO.408/CT K/2011 4 THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S.147 ON THE FINDING THAT THE ASSESSEES MOTHER BEING A CO - OWNER HAD CLAIMED INTEREST OF 2,29,223 AS AGAINST 2,66,280 AS CLAIMED BY THE ASSESSEE THEREFORE WAS NOT EQUAL WHEN HE PROCEEDED TO COMPUTE THAT THE SUM OF 42,020 PAID AS INTEREST TO BANK OF INDIA WAS NOT FOR THE PROPERTY BELONGING TO THE ASSESSEES BEFORE US . THE LEARNED CIT(A), ON THE OTHER HAND, CONFIRMED THE ACTION OF THE ASSESSING OFFICER WITHOUT ID ENTIFYING THAT THE CLAIM HAS BEEN MADE FROM THE INCOME ON ACCOUNT OF RENT RECEIVED BY FOUR CO - OWNERS WHICH PROPERTY COULD NOT BE DISTINGUISHED FOR THE PURPOSE OF BANK CHARGING INTEREST THERE UPON . WHEN THE INCOME HAS BEEN ALLOCATED IN ACCORDANCE WITH THE P ROPERTY WHICH THE BANK HAD FINANCED , THERE WAS NO REASON FOR THE ASSESSING OFFICER OR THE LEARNED CIT(A) TO IDENTIFY THE PROPERTY FOR CLAIMING INTEREST SEPARATELY AT A LOWER FIGURE. IT WAS A MUTUAL AGREEMENT FOR THE CO - OWNERS TO SHARE THE INTEREST PORTION EQUALLY AND THEREFORE WITHOUT IDENTIFYING THE PROPERTY, THE ASSESSING OFFICER PUT FORWARD HIS OWN LOGIC FOR DISALLOWING 19,610 WITHOUT IDENTIFYING HOW TH IS AMOUNT OF INTEREST CHARGED BY BANK OF INDIA AMOUNTING TO 42,020 CAN BE DISALLOWED IN THE HANDS OF THE ASSESSEE ONLY. THE ASSESSEE HAS SUBMITTED A COPY OF THE ORDER OF THE LEARNED CIT(A) I N THE CASE OF SMT.MANORAMA MISH RA, THE MOTHER OF THE ASSESSEE BEING THE CO - OWNER CLINCHES THE ISSUE I N FAVOUR OF THE ASSESSEE THAT THE LEARNED CIT(A) COULD NOT IDENTI FY THE INTEREST TO BE DISALLOWED AMOUNTING TO 19,610 IN CASE OF THE ASSESSEE. HAVING ALLOWED INTEREST AMOUNTING TO 2,29,223 IN THE CASE OF MANMOHAN MISHRA THERE WAS NO REASON FOR THE ASSESSEE BEING DENIED THE CLAIM OF INTEREST OF 19,610. WE DIRECT THE A SSESSING OFFICER TO DELETE THIS DISALLOWANCE. 6. IN SOFAR AS THE ADDITION OF 51,000 BEING DRAW IN GS IN THE HANDS OF THE ASSESSEE U/S.69C, WE ARE UNABLE TO ACCEPT THE LOGIC FOR TAXING THE SAME IN ITA NO.408/CT K/2011 5 THE HANDS OF THE ASSESSEE WHEN THE ASSESSING OFFICER REQUIRED IT TO EXPLAIN THE LOW DRAWINGS OF 40,000 FROM THE CAPITAL OF THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEE EXPLAINED THAT HE HAD BEEN DEPOSITIN G THE SALARY INCOME IN THE BANK WHICH WAS WITHDRAWN FOR HOUSE HOLD EXPENSES BY USE OF ATM CARD IN CASH AND CREDIT. THIS EXPLANATION SHOULD HAVE S UFFICED FOR NOT MAKING ANY ADDITION U/S.69C INSOFAR AS 51,000 WAS RATHER UTILIZED FOR HOUSE HOLD EXPENSES LEAN IN FAVOUR OF THE ASSESSEE ON THE QUERY RAISED BY THE ASSESSING OFFICER FOR LOW DRAWINGS . WE FIND FORCE IN THE SUBMISSIONS OF THE LEARNED COUNSEL THAT THE LEARNED CIT(A) WITHOUT APPLICATION OF MIND , HAS CONFIRMED THE SAME WITHOUT GIVING ANY REASON ON THE FACTS BROUGHT ON RECORD . BY NO STRETCH OF IMAGINATION CAN AN INCOME BE TAXED AGAIN WHEN THE SAME I S UTILIZED AFTER WITHDRAWING IT FROM THE BANK WHERE IT WAS DEPOSITED. IN VIEW OF THE ABOVE, THE ADDITION U/S.69C IS HEREBY DIRECTED TO BE DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 13.01.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: DEBASIS MISHRA, SATYANIVAS, MADHUPATNA, P.O.KALYANI NAGAR, CUTTACK 753 013, ODISHA 2. THE RES PONDENT: 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.