Sh. Binu Nair, New Delhi V. ITO, New Delhi

ITA 529/DEL/2014

• Counselvise Citation: 52920114 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 21-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN COMMISSIONER
• Assessee Lawyers: SUMIT GOE L
• Keywords: Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER ITA NO. 529/DEL/2014 ASSTT. YRS: 2009-10 BINU NAIR, VS. INCOME-TAX OFFICER, C/O RAJ KUMAR & ASSOCIATES, CA WARD 48(2), NEW DEL HI. 4435/7, ANSARI ROAD, DARYA GANJ, NEW DELHI. PAN: AAIPN 4744 L ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI RAJ KUMAR GUPTA FCA & SHRI SUMIT GOEL CA RESPONDENT BY : SHRI S.K. JAIN ADDL. COMMISSIONER DATE OF HEARING : 23/07/2015. DATE OF ORDER : 09/09/2015. O R D E R PER S.V. MEHROTRA, A.M.. : THIS APPEAL, PREFERRED BY THE ASSESSEE, IS DIRECT ED AGAINST THE ORDER OF LD. CIT(A)-XXX, NEW DELHI DATED 30-10-2013 PASSED IN AP PEAL NO. 3228/11-12, RELATING TO A.Y. 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, IN THE RELEVANT ASSESSMENT YEAR, DERIVED INCOME FROM SALARY. HE HAD FILED ITS RETURN OF INCOME DECLARING TOTAL 2 ITA 529/DEL/2014 BINU NAIR VS. ITO INCOME OF RS. 9,38,749/-. THE AO NOTICED THAT ASSES SEE HAD CLAIMED HRA AMOUNTING TO RS. 3,80,856/-. HE NOTICED THAT THE AS SESSEE HAD ALSO SHOWN THE SELF OCCUPIED PROPERTY AT ADDRESS 1-D, POCKET B, SFS FLA TS, OUTER RING ROAD, NEW DELHI-110018 IN HIS INCOME TAX RETURN. HOWEVER, AS PER THE CERTIFICATE OF INTEREST OF HDFC BANK , THE ASSESSEES SELF OCCUPIED PROPERTY W AS M-139, ASHIANA UTSAV BHIWADI-301019, FOR WHICH HE HAD TAKEN LOAN AND CLA IMING DEDUCTION U/S 24(B) OF RS. 1,50,000/-. THE AO, AFTER EXAMINING THE BANK ST ATEMENT NOTED THAT THOUGH ASSESSEE HAD CLAIMED OF HAVING MADE THE PAYMENT OF RENT @ RS. 32,000/- PER MONTH, BUT THERE WAS NO SUFFICIENT CASH WITHDRAWALS AND NO SUCH ENTRY I.E. CASH/ CHEQUE IN RESPECT OF RENT PAID BY THE ASSESSEE. HE , THEREFORE, DISALLOWED THE ASSESSEES CLAIM OF HRA AND MADE ADDITION OF RS. 3, 80,856/-. 3. LD. CIT(A) CONFIRMED THE ADDITION, INTER ALIA, O BSERVING THAT TOTAL CASH WITHDRAWAL OF THE ASSESSEE WAS RS. 3,82,000/- OUT O F WHICH ASSESSEE CLAIMED THAT RS. 3,80,856/- WAS PAID TOWARDS HRA AND THERE WAS N O REGULAR WITHDRAWAL OF CASH FROM BANK, THEREFORE, EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTABLE, INTER ALIA, OBSERVING THAT IF ALL THE CASH WITHDRAWALS WERE GIV EN TO THE LAND-LORD, THEN HOW ASSESSEE SURVIVED. 3.1. LD. COUNSEL FOR THE ASSESSEE HAS FILED A SUMMA RY OF WITHDRAWALS/ HOUSE HOLD EXPENSES. LD. COUNSEL FURTHER SUBMITTED THAT ASSESS EE PAID RENT OF RS. 3,84,000/- AND CLAIMED HRA AT RS. 3,80,856/- FOR RENTED PROPER TY NO. 1-D, POCKET B, SFS FLATS, OUTER RING ROAD, NEW DELHI-110018. HE HAS FI LED THE COPY OF RENT AGREEMENT DATED 11-2-2011 IN WHICH IT IS STATED THA T THE TENANCY COMMENCED FROM 1-4-2008 FOR A PERIOD OF 5 YEARS. HE FURTHER POINTE D OUT THAT THE AMOUNT WAS PAID IN CASH AS THE OWNER WAS SUFFERING FROM PARKINSON D ISEASE AND, THEREFORE, WAS NOT 3 ITA 529/DEL/2014 BINU NAIR VS. ITO COMPETENT FOR WRITING ANYTHING AND FOR OPERATING BA NK ACCOUNT. THE LAND-LORD ULTIMATELY DIED ON 22-8-2009. LD. COUNSEL SUBMITTED THAT THERE IS NO DISPUTE THAT HOUSE RENT WAS PAID ON WHICH ASSESSEE WAS ELIGIBLE FOR HRA DEDUCTION. HE POINTED OUT THAT THE ONLY REASON FOR DISALLOWANCE WAS INSUF FICIENT CASH WITHDRAWALS FROM BANK FOR PAYMENT OF RENT AND FOR HOUSE-HOLD EXPENSE S. IN THIS REGARD LD. COUNSEL REFERRED TO THE SUMMARY OF BANK WITHDRAWALS/ HOUSE- HOLD EXPENSES, CONTAINED AT PAGE 1 OF THE PB AND POINTED OUT THAT THE TOTAL CAS H WITHDRAWALS WERE RS. 3,82,100 AND HOUSE-HOLD EXPENSES RS. 4,48,128/-, WHICH MET T HE CAR INSURANCE, CREDIT CARD PAYMENT, LIC PREMIUM PAYMENT, PHONE BILLS, PPF ACCO UNT, SCHOOL ADMISSION FEE, PARENTS A/C/ WIFE ACCOUNT. HE FURTHER SUBMITTED THA T, IN ANY VIEW OF THE MATTER, ON THE BASIS OF INSUFFICIENT CASH WITHDRAWAL, HRA COUL D NOT BE DISALLOWED. 4. I HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIES . I FIND CONSIDERABLE MERIT IN THE ARGUMENT OF LD. COUNSEL FOR THE ASSESSEE THAT O NCE AO DID NOT DISPUTE THE PAYMENT OF HRA, THEN THE DEDUCTION ON ACCOUNT OF PA YMENT OF HRA COULD NOT BE DENIED AGAINST THE INCOME FROM SALARY. I FURTHER FI ND THAT THE ASSESSEE HAD SUFFICIENTLY EXPLAINED THE REASONS FOR PAYMENT OF R ENT IN CASH AND ALSO DEMONSTRATED THAT THERE WERE CASH WITHDRAWALS WHICH WERE ALMOST SUFFICIENT TO MEET THE RENT PAYMENT REQUIREMENT. FURTHER, OTHER H OUSE-HOLD EXPENSES WERE EASILY MET AS IS EVIDENT FROM THE CHART SUBMITTED BY ASSES SEE. FURTHER, THE ASSESSEE HAS ALSO POINTED OUT THAT IT HAD SOME CASH IN HAND ALSO AVAILABLE FROM EARLIER YEARS, WHICH ASPECT ALSO CANNOT BE DOUBTED. UNDER SUCH CIR CUMSTANCES, I FIND THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS QUITE REASONA BLE AND, THEREFORE, THE DEDUCTION ON ACCOUNT OF PAYMENT OF HRA COULD NOT BE DENIED TO ASSESSEE. ACCORDINGLY, ORDER OF LD. CIT(A) ON THE ISSUE IN QU ESTION IS SET ASIDE AND THE ASSESSEES CLAIM IS ALLOWED. 4 ITA 529/DEL/2014 BINU NAIR VS. ITO 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09/09/2015.. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 09/09/2015. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. 5 ITA 529/DEL/2014 BINU NAIR VS. ITO - + DATE INITIAL 1. DRAFT DICTATED ON - 09.2015 PS 2. DRAFT PLACED BEFORE AUTHOR .09.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.