MANOJ GROVER, NEW DELHI V. ACIT, CIRCLE- 68(1), NEW DELHI

ITA 6117/DEL/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7181 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 29-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: K P GANGULI
• Keywords: Salary income; Reassessment proceedings; Borrowed satisfaction
• Section: 147; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6117/DEL/2017 ASSESSMENT YEAR : 2012-13 MANOJ GROVER, 7/130, RAMESH NAGAR, NEW DELHI. VS. ACIT, CIRCLE- 68(1), NEW DELHI. PAN : ACUPG0810E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. P. GANGULI, ADV. DEPARTMENT BY : SHRI S. L. ANURAGI, SR. DR DATE OF HEARING : 19-07-2018 DATE OF PRONOUNCEMENT : 28-09-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 26.07.2017 OF THE CIT(A)- 21, NEW DELHI RELATING TO ASSESSMENT YEAR 2012-13. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A DEVELOPMENT OFFICER- CUM- BUSINESS ASSOCIATE WITH LIC OF INDIA. HE FILE D HIS RETURN OF INCOME ON 06.03.2013 DECLARING TOTAL INCOME OF RS.21,51,950/- . THE CASE WAS REOPENED U/S 147 AFTER RECORDING REASONS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED FROM THE RECORDS THA T AS PER FORM NO.16 FOR THE YEAR UNDER CONSIDERATION THE SALARY INCOME IS REFLE CTED AT RS.28,66,404/-. HOWEVER, THE ASSESSEE IN HIS RETURN OF INCOME HAS D ECLARED TOTAL SALARY OF RS.21,22,706/-. THE DIFFERENCE OF RS.7,43,692/- WA S CLAIMED EXEMPT U/S 10(14)(1) OF THE I.T. ACT, 1961 UNDER THE FOLLOWING HEADS :- 2 ITA NO.6117/DEL/2017 (I) CONVEYANCE EXPENSES RS.1,80,557/- (II) ALLOWANCE TO D.O. FOR PROCURING BUSINESS RS.1, 80,557/- (III) OFFICE MANAGEMENT EXPENSES RS.3,00,000/- (IV) TRANSACTION FEE RS.82,584/- TOTAL RS.7,43,698/- 3. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPL AIN AS TO HOW THE ABOVE AMOUNTS CAN BE CLAIMED AS EXEMPT U/S 10(14)(1) OF T HE I.T. ACT SINCE THERE IS NO EVIDENCE THAT ALLOWANCE WAS ACTUALLY INCURRED OR HO W MUCH AMOUNT WAS INCURRED. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE, THE ASSESSING OFFICER AFTER ALLOWING RS.9,600/- TOWARDS CONVEYANCE EXPENSES AT THE RATE OF RS.800 PER MONTH MADE ADDITION RS.7,34,098/ - TO THE TOTAL INCOME OF THE ASSESSEE. 4. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF T HE ASSESSING OFFICER. 5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT THE LEARNED ASSESSING OFFICER (AO') ERRED IN PASSING THE IMPUGNED ASSESSMENT ORDER DT. 29.03.2016 U/S 143/147 OF THE INCOME TAX ACT 1961 & THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) 21 VID E HIS APPELLATE ORDER U/S 250(6) OF THE INCOME TAX ACT 1961 RECEIVED BY THE A PPELLANT ON 8 TH AUGUST 2017 ERRED IN DISMISSING THE APPEAL MADE BY THE APPELLANT UNDE R SECTION 246A OF THE ACT. ON THE FACTS & CIRCUMSTANCES IN THE CASE & IN LAW THE LEAR NED AO HAS ERRED IN DISALLOWING THE CLAIM OF EXEMPTION OF RS.7,34,098/- WHEN THIS C LAIM WAS ALLOWABLE AS PER THE PROVISIONS OF SECTION 10(14)(1) OF THE INCOME TAX A CT, 1961 WITH REFERENCE TO THE CIRCULARS ISSUED BY THE LIC. THE HONBLE CIT APPEA L 21 HAS ERRED IN REJECTING THE CONTENTIONS OF THE APPELLANT AND DISMISSED THE APPE AL OF THE ASSESSEE. 2. THAT THE LEARNED AO & HONBLE CIT (APPEAL) HAS E RRED IN LAW IN NOT CONSIDERING THE DETAILS AND DOCUMENTARY EVIDENCE IN CLUDING THE CIRCULARS, BILL VOUCHERS ETC. WHICH WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. 3. THAT THE DISALLOWANCE MADE BY THE AO & CONFIRMED BY THE HONBLE CIT APPEAL 21 DESERVES TO BE DELETED IN APPEAL. 3 ITA NO.6117/DEL/2017 4. THAT THE APPELLANT RESERVES THE RIGHT TO CHANGE, ALTER, MODIFY THESE GROUNDS OF APPEAL OR ADD ANY OTHER GROUND OF APPEAL EITHER BEF ORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 6. THE ASSESSEE HAS ALSO FILED THE FOLLOWING ADDITI ONAL GROUNDS :- (I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 68(1), DELHI WA S NOT JUSTIFIED IN INITIATING RE- ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE INC OME TAX ACT, 1961 ON THE BASIS OF INFORMATION RECEIVED FROM THE ADDITIONAL COMMISSION ER OF INCOME TAX, RANGE-68, AND WITHOUT APPLICATION OF HIS MIND. (II) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-68(1), DELHI WAS NOT JUSTIFIED IN INITIATING RE- ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE INC OME TAX ACT, 1961 ON THE BASIS OF SATISFACTION BORROWED FROM THE ADDITIONAL COMMISSIO NER OF INCOME TAX, RANGE-68, AND WITHOUT APPLICATION OF HIS MIND. 7. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO TH E DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC VS. CIT REPORTED IN 229 ITR 383, THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF ORISSA CEMENT LTD. VS. CIT REPORTED IN 250 ITR 856 AND VARIOUS OTHER DECIS IONS SUBMITTED THAT THESE GROUNDS BEING LEGAL GROUNDS AND ALL MATERIAL FACTS ARE AVAILABLE ON RECORD, THEREFORE, THESE ADDITIONAL GROUNDS SHOULD BE ADMIT TED. 8. AFTER HEARING BOTH THE SIDES, THE ADDITIONAL GRO UNDS RAISED BY THE ASSESSEE ARE ADMITTED FOR ADJUDICATION. 9. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE WAS REOPENED ON THE BASIS OF RECOMMENDATION OF THE JCIT FOR INITIATING REASSESSMENT PROCEEDINGS U/S 147/148 OF THE I.T. AC T, 1961. THUS, THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND INDEPEND ENTLY AND THE ASSESSING 4 ITA NO.6117/DEL/2017 OFFICER REOPENED THE ASSESSMENT ON THE BORROWED SAT ISFACTION. RELYING ON VARIOUS DECISIONS INCLUDING THE DECISIONS OF THE HO NBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. G AND G PHARMA INDIA LTD. REPORT ED IN 384 ITR 147 AND ITO VS. MOKSHA SECURITIES P. LTD. REPORTED IN 50 ITR 13 0, HE SUBMITTED THAT THE REASSESSMENT PROCEEDINGS ARE BAD IN LAW. SO FAR AS MERIT OF THE CASE IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE LOWER AUTHORITIES HAVE NOT CONSIDERED THE COMPLETE DETAILS OF EXPENSE S ALONG WITH DOCUMENTARY EVIDENCES SUCH AS BILLS/VOUCHERS FILED DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. ALTHOUGH THE ASSESSEE HAD FILED FULL DETAILS WITH DOCUMENTARY EVIDENCE, HOWEVER, THE CLAIM WAS REJECTED ON THE GR OUND THAT NO EVIDENCE SHOWING INCURRING OF THE EXPENSES WAS FILED. HE AC CORDINGLY SUBMITTED THAT THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE ALLOWED AN D THE ORDER OF THE LD. CIT(A) SHOULD BE SET-ASIDE. 10. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE IN THE INSTANT CASE FILED APPLICATION FOR RECTIFICATION U/S 154 IN THE OFFICE OF THE ASSESSING OFFICER CLAIMING REFUND OF RS.1,92,280/-. WHEN THE MATTER WENT TO THE JCIT FOR APPROVAL OF REFUND, THE JCIT OBSERVED THAT THERE IS VARIATION IN THE INCOME DECLARED IN THE INCOME TAX RETURN AS PER FORM NO.26 AS. HE, THEREFORE, ASKED THE ASSESSING OFFICER TO EXAMINE THE ISSUE OF VARIA TION OF INCOME DECLARED IN THE INCOME TAX RETURN. THE ASSESSING OFFICER AFTER PERUSAL OF THE RECORDS FOUND THAT THERE IS DIFFERENCE IN THE TAXABLE INCOME AS R EFLECTED IN FORM NO.26AS AS 5 ITA NO.6117/DEL/2017 DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FO R WHICH HE HAS INITIATED THE REASSESSMENT PROCEEDINGS. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THE ASSESSING OFFICER INITIATED REASSESSMENT PROCEEDING S ON BORROWED SATISFACTION IS NOT CORRECT. HE FURTHER SUBMITTED THAT THE ISSU E OF CHALLENGING THE REASSESSMENT PROCEEDINGS WAS NEVER RAISED BEFORE TH E LD. CIT(A). THEREFORE, THE ASSESSEE CANNOT RAISE THIS GROUND NOW. EVEN OT HERWISE ALSO, THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND HAS INITIATED THE REASSESSMENT PROCEEDINGS AND, THEREFORE, IT CANNOT BE SAID THAT THE SAME HAS BEEN DONE ON BORROWED SATISFACTION. SO FAR AS THE MERIT OF THE CASE IS C ONCERNED, HE SUBMITTED THAT THE ASSESSEE ADMITTEDLY DID NOT FURNISH THE REQUISITE D ETAILS BEFORE THE ASSESSING OFFICER FOR WHICH HE REJECTED THE CLAIM OF EXEMPTIO N U/S 10(14)(1) OF THE I.T. ACT. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF TH E LD. CIT(A) BE UPHELD. 11. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THE GROUN D CHALLENGING THE VALIDITY OF REASSESSMENT PROCEEDINGS WAS NOT RAISED BEFORE THE LD. CIT(A) AND THE ASSESSEE FOR THE FIRST TIME HAS RAISED THIS LEGAL GROUND BEF ORE THE TRIBUNAL IN SHAPE OF TWO ADDITIONAL GROUNDS. IT IS ALSO THE ALLEGATION OF T HE LD. COUNSEL FOR THE ASSESSEE THAT DESPITE SUBMISSION OF VARIOUS DETAILS INCLUDIN G THE BILLS/VOUCHERS IN SUPPORT OF THE CLAIM OF EXEMPTION U/S 10(14)(1), THE LOWER AUTHORITIES HAVE NOT CONSIDERED THE SAME. UNDER THESE CIRCUMSTANCES, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTIO N TO DECIDE THE ISSUE CHALLENGING 6 ITA NO.6117/DEL/2017 THE VALIDITY OF THE REASSESSMENT PROCEEDINGS. FURT HER, SINCE THE VARIOUS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE WERE NO T CONSIDERED BY THE LOWER AUTHORITIES AS STATED BY THE LD. COUNSEL FOR THE AS SESSEE AT THE BAR, THEREFORE, LD. CIT(A) IS DIRECTED TO CONSIDER THE EVIDENCES SO FIL ED AS CLAIMED BY THE LD. COUNSEL FOR THE ASSESSEE AND DECIDE THE ISSUE AS PE R FACT AND LAW. NEEDLESS TO SAY, THE LD. CIT(A) SHALL GIVE DUE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH SEPTEMBER, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 28-09-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI