ANIL KUMAR NEHRU, MUMBAI V. ADDL CIT CIR 16(2), MUMBAI

ITA 5749/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3700 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-04-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 11-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARESH G BUCH
• Keywords: Salary income
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BE NCH, MUMBAI . , !' # # # # $% &, () $*+ ( $' BEFORE SHRI D. MANMOHAN, V. P. AND SHRI SANJAY AR ORA, A. M. $./ I.T.A. NO. 8979/MUM/2010 ( - #.- - #.- - #.- - #.- / / / / ASSESSMENT YEAR: 2007-08) ASSTT. CIT 16(2), MATRU MANDIR, TARDEO ROAD, MUMBAI-400 007 / VS. ANIL KUMAR NEHRU 24, BRIGHTON RUNGTA LANE, 68-D, NEPEAN SEA ROAD, MUMBAI 400 036 +/ () $ ./ % 0 $ ./ PAN/GIR NO. AAAPN 9136 G ( /1 / APPELLANT ) : ( 23/1 / RESPONDENT ) & $ ./ I.T.A. NO. 5749/MUM/2011 ( - - - - #.- #.- #.- #.- / ASSESSMENT YEAR: 2007-08) ANIL KUMAR NEHRU 5B ANANTA, 762 RAJABALLY PATEL ROAD, MUMBAI-400 026 / VS. ASSTT. CIT 16(2), MATRU MANDIR, TARDEO ROAD, MUMBAI-400 007 +/ () $ ./ %0 $ ./ PAN/GIR NO. AAAPN 9136 G ( /1 / APPELLANT ) : ( 23/1 / RESPONDENT ) /1 4 $( / APPELLANT BY : MS. NEERAJA PRADHAN 23/1 5 4 $( / RESPONDENT BY : SHRI HARESH G. BUCH $# 5 6) / // / DATE OF HEARING : 25.04.2013 7. 5 6) / DATE OF PRONOUNCEMENT : 25.04.2013 *(8 / O R D E R 2 ITA NO.8979 & 5749/MUM/2010 & 2011 (A.Y. 2007-08) ANIL KUMAR NEHRU PER SANJAY ARORA, A. M.: THIS IS A SET OF CROSS APPEALS, I.E., BY THE ASSESS EE AND THE REVENUE, IMPUGNING THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2 7, MUMBAI (CIT(A) FOR SHORT) DATED 22.09.2010, PARTLY ALLOWING THE ASSESSEES AP PEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT H EREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2007-08 VIDE ORDER DATED 04.12.2009. 2. AT THE VERY OUTSET, IT WAS CONTENDED BY THE LD. AR, THE ASSESSEES COUNSEL, THAT EACH OF THE ISSUES RAISED PER THE ASSESSEES AS WEL L AS THE REVENUES APPEAL STANDS COVERED BY THE ORDERS OF THE TRIBUNAL IN ITS OWN CA SE FOR THE EARLIER YEARS, DECIDING THE SAME EITHER IN FAVOUR OF OR AGAINST THE ASSESSEE. T HERE BEING NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SAID ORDERS WERE PRA YED FOR BEING FOLLOWED. UPON THIS, HE WOULD TAKE US, ISSUE-WISE, TO THE DIFFERENT ORDERS BY THE TRIBUNAL PLACED ON RECORD AS A PART OF THE ASSESSEES PAPER-BOOK (PB). THE LD. DR DID N OT RAISE ANY OBJECTION TO THE SAID CONTENTIONS BY THE LD. AR. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 WE SHALL TAKE UP THE ASSESSEES APPEAL, BEING S ENIOR, FIRST. THE FIRST ISSUE, RAISED PER ITS GROUND NO.1 BY THE ASSESSEE, IS IN RESPECT OF THE ASSESSMENT OF THE GAINS ARISING TO THE ASSESSEE ON THE EXERCISE OF RIGHTS UNDER ESOP A S PERQUISITES, TAXABLE UNDER THE HEAD OF INCOME SALARIES, AS AGAINST LONG TERM CAPITAL GAINS (LTCG) RETURNED BY THE ASSESSEE. THE TRIBUNAL, PER ITS COMBINED ORDER FOR THE TWO PRECEDING YEARS, I.E., FOR AYS 2004-05 AND 2005-06 (IN ITA NOS. 526 & 527/MUM/2009 DATED 21.10.2011), DISMISSED THE ASSESSEES APPEAL FOLLOWING ITS EARLIER ORDER I N THE ASSESSEES OWN CASE, I.E., FOR A.YS. 1999-2000 TO 2002-03, VIDE PARAS 2 TO 5 OF ITS ORDE R. THE ISSUE BEING ONE OF PRINCIPLE, WITH NO CHANGE IN FACTS BEING BROUGHT TO OUR NOTICE , AND EVEN AS FAIRLY CONCEDED TO AS BEING COVERED BY BOTH THE PARTIES, WE DISMISS THE A SSESSEES GROUND NO. 1, UPHOLDING THE IMPUGNED ORDER, CONFIRMING THE ASSESSMENT OF THE GA INS ON (THE TRANSFER OF) THE STOCK 3 ITA NO.8979 & 5749/MUM/2010 & 2011 (A.Y. 2007-08) ANIL KUMAR NEHRU OPTIONS AVAILED OF BY THE ASSESSEE AS A PART OF HIS SALARY INCOME. WE DECIDE ACCORDINGLY, DISMISSING THE ASSESSEES GROUND NO.1. 3.2 GROUND NO. 2 IS IN RESPECT OF DISALLOWANCE OF T HE MANAGEMENT FEES PAID BY THE ASSESSEE TO THE FOREIGN BANK/ADVISOR IN RESPECT OF THE ASSETS HELD BY IT IN THE FIDUCIARY TRUST OF INTERNATIONAL (FTI) ACCOUNT. THE TRIBUNAL VIDE ITS ORDER DATED 26.12.2012, DECIDING THE ASSESSEES APPEALS FOR A.YS. 2004-05 A ND 2005-06 (IN ITA NOS. 526 & 527/MUM/2009) HAS, AFTER A DETAILED DISCUSSION IN T HE MATTER, CONSIDERED IT FIT, GIVEN THE INVESTMENT MANDATE OF A BALANCE FUND, TO DIRECT ALL OWANCE OF 50% OF THE IMPUGNED SUM PAID BY WAY OF MANAGEMENT FEES AS ALLOWABLE U/S.57( III), CONFIRMING THE DISALLOWANCE OF THE BALANCE 50%. REFERENCE IN THIS REGARD MAY BE MA DE TO PARA 4 (PAGES 3 TO 7) OF ITS ORDER. NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE BEING BROUGHT TO OUR NOTICE BY EITHER SIDE WE SEE NO REASON NOT TO ADOPT THE SA ID PERCENTAGE FOR THE CURRENT YEAR AS WELL. ACCORDINGLY, 50% OF THE IMPUGNED DISALLOWANCE STANDS DELETED, WHILE THE BALANCE 50% IS CONFIRMED. WE DECIDE ACCORDINGLY, PARTLY ALL OWING THE ASSESSEES GROUND NO.2. 3.3 THE THIRD AND THE FINAL GROUND OF THE ASSESSEE S APPEAL ASSAILS THE DIRECTION BY THE LD. CIT(A) IN UPHOLDING THE A.O.S ACTION IN COMPUT ING THE INCOME FROM HOUSE PROPERTY OF THE ASSESSEES FOUR HOUSE PROPERTIES BY ESTIMATI NG ANNUAL RATABLE VALUE (ALV) THEREOF. THOUGH THE ASSESSEE RETURNED THE ANNUAL VA LUE IN RESPECT OF EACH OF THE SAID PROPERTIES, I.E., OTHER THAN THE ONE SELF-OCCUPIED PROPERTY, THE SAME, SAVE ONE (BEING AT KISAN GARH, NEW DELHI), WERE FAR BELOW THAT ESTIMAT ED BY THE AO. AS PER THE ASSESSMENT ORDER, THE AOS ESTIMATION IS SUPPORTED BY FIELD EN QUIRIES CONDUCTED THROUGH THE INVESTIGATION WING OF THE DEPARTMENT. THE ASSESSEE SECURED PART RELIEF IN APPEAL INASMUCH AS THE ALV OF THE PANCHKULA PROPERTY WAS D IRECTED BY THE LD. CIT(A) TO BE TAKEN AT RS.60,000/-, I.E., AS AGAINST RS.1.44 LAKH S ASSESSED BY THE A.O. THE ASSESSEE IS IN APPEAL FOR THE BALANCE ADDITION, WHICH STANDS CONFI RMED, AND WHICH HAS BEEN BY THE LD. CIT(A) FOLLOWING THE ORDER BY THE FIRST APPELLATE A UTHORITY IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS. THE TRIBUNAL, VIDE ITS ORDER DAT ED 21.10.2011 (SUPRA), HAS, FINDING THE MATTER TO BE COVERED IN PRINCIPLE BY THE DECISION B Y THE CO-ORDINATE BENCH IN THE CASE OF 4 ITA NO.8979 & 5749/MUM/2010 & 2011 (A.Y. 2007-08) ANIL KUMAR NEHRU ABHIJIT RANJAN VS. ACIT (IN ITA NO.2843/MUM/2009 DATED 27.04.2011), RESTOR ED THE MATTER BACK TO THE FILE OF THE A.O. FOR FRESH ADJUD ICATION PER A SPEAKING ORDER IN ACCORDANCE WITH LAW, AND AFTER GIVING PROPER OPPORT UNITY OF HEARING TO THE ASSESSEE. THE TRIBUNAL WHILE DISCUSSING THE MATTER PER PARA 11 OF ITS ORDER, HAS REPRODUCED THE RELEVANT PART OF THE ORDER IN THE CASE OF ABHIJIT RANJAN (SUPRA), WHEREIN THE LAW IN THE MATTER STANDS ALSO DISCUSSED. WE SEE NO REASON FOR TAKING ANY DIFFERENT VIEW IN THE MATTER AND, ACCORDINGLY, RESPECTFULLY FOLLOWING THE SAME, DIREC T LIKEWISE IN THE INSTANT CASE. THE MATTER IS ACCORDINGLY RESTORED BACK TO THE FILE OF THE A.O WITH LIKE DIRECTIONS. WE DECIDE ACCORDINGLY. 3.4 THE ONLY ISSUE PER THE REVENUES APPEAL IS THE LEVY OF INTEREST U/S.234B OF THE ACT. THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 19 99-2000 TO 2001-02, VIDE ITS ORDER DATED 23.12.2008 (PB PGS.16-18), HAS CLARIFIED, ON THE BASIS OF THE DECISION BY ITS SPECIAL BENCH IN THE CASE OF SUMIT BHATTACHARYA , THAT INTEREST U/S.234B IS TO BE LEVIED BY TAKING INTO ACCOUNT THE TAX DEDUCTIBLE (ON THE ASSESSEES INCOME EXIGIBLE TO TAX DEDUCTION AT SOURCE), THOUGH NOT ACTUALLY DEDUCTED. THE A.O. IS, THEREFORE, DIRECTED TO COMPUTE THE ASSESSEES INTEREST LIABILITY U/S. 234B IN TERMS OF THE SAID DIRECTION. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE REVENUES APPEAL IS AL LOWED FOR STATISTICAL PURPOSES. 9 6: -96 5 $;5 <(=, $;5 <(= ( 8 +#>6 5 %6 ? %+# 5 $;5 <(= ( +# >6 5 %6 ? ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH APRIL, 2013 *(8 5 7. )( @*: 25 TH APRIL, 2013 5 A SD/- SD/- ( D. MANMOHAN ) ( SANJAY ARORA ) !' / VICE PRESIDENT () $*+ / ACCOUNTANT MEMBER MUMBAI; @* DATED : 25/4/2013 5 ITA NO.8979 & 5749/MUM/2010 & 2011 (A.Y. 2007-08) ANIL KUMAR NEHRU #..$./ ROSHANI , SR. PS *(8 5 26B C(B.6 *(8 5 26B C(B.6 *(8 5 26B C(B.6 *(8 5 26B C(B.6/ COPY OF THE ORDER FORWARDED TO : 1. /1 / THE APPELLANT 2. 23/1 / THE RESPONDENT . 3. D ( ) / THE CIT(A) 4. D / CIT - CONCERNED 5. B#G A 26 , , / DR, ITAT, MUMBAI 6. A- H / GUARD FILE. *(8$ *(8$ *(8$ *(8$ / BY ORDER, / // /$ % $ % $ % $ % (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI