Thomas Philips, New Delhi V. ITO, Ward- 61(5), New Delhi

ITA 6477/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5009 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 02-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VED PRAKASH MISHRA
• Assessee Lawyers: S. SRINIVASAN
• Keywords: Opportunity of being heard; Earning of tax free income; Rule 8D; Capital Gains
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-2 NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBE R & SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO. 6477/DEL/2019 ( ASSESSMENT YEAR: 2016-17) HEARD THROUGH VIDEO CONFERENCING THOMAS PHILIPS 19, KAILASH KUNJ APARTMENTS, GREATER KAILASH, PART-1, NEW DELHI. PAN NO. AAGPP8604F VS ITO, WARD 61(5), NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SH. S. SRINIVASAN, CA REVENUE BY SH. VED PRAKASH MISHRA, SR. DR ORDER PER SHRI RAMIT KOCHAR, A.M. THIS APPEAL IN ITA NO. 6477/DEL/2019 FOR ASSESSMENT YEAR 2016-17 HAS ARISEN FROM APPELLATE ORDER DATED 04.06 .2019 PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-20, NEW DELHI IN ITA NO. 10216/2018-19, WHICH IN TURN HAS ARISEN FROM AS SESSMENT ORDER DATED 20.12.2018 PASSED BY LD. ASSESSING OFFI CER U/S 143(3) OF THE INCOME-TAX ACT, 1961. THIS APPEAL IS HEARD THROUGH VIDEO CONFERENCING. DATE OF HEARING 14.10.2020 DATE OF PRONOUNCEMENT 14.10.2020 2 ITA NO. 6477/DEL/2019 2. THE GROUNDS OF APPEAL RAISED BY ASSESSEE IN THE APPEAL IN ITA NO. 6477/DEL/2019 FOR ASSESSMENT YEAR 2016-17 FILED WITH INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED: A) THE LEARNED CIT APPEALS HAS FAILED TO OBSERVE THAT THE APPELLANT HAS NOT CLAIMED ANY EXPENDITURE IN THE COMPUTATION OF INCOME AND HAS ERRED IN: B) INVOKING THE PROVISIONS OF SECTION 14A READ WITH RU LE 8D. C) IN CONFIRMING THE ADDITION OF RS. 4,74,191/- ESPECI ALLY WHEN THE FACT THAT NO EXPENDITURE HAS BEEN CLAIMED IN THE RETURN OF INCOME HAS BEEN CLEARLY STATED. 2. THE LEARNED CIT APPEALS HAS ERRED IN CONFIRMING THA T THE DISALLOWANCE U/S 14A FOR RS. 4,74,191/- ESPECIALLY WHEN THE PROVISO TO RULE 8D STATES PROVIDED THAT THE AM OUNT REFERRED TO IN CLAUSE (I) AND CLAUSE (II) SHALL NOT EXCEED THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VARY, OMI T OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL A T ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PROFESSIONAL DOCTOR AND HAS EARNED INCOME FROM PROF ESSION OF DOCTOR (DECLARED UNDER THE HEARD INCOME FROM OTHER SOURCES), CAPITAL GAINS, HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. THE ASSESSEE HAS EARNED EXEMPT INCOME BY WAY OF DIVIDEN D TO THE TUNE OF RS. 11,47,898/- AND HAD MADE HUGE INVESTMENTS, D URING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS CLAIMED THAT IT HAS NOT INCURRED ANY EXPENDITURE WHILE MAKING INVESTMEN TS AND IN RELATION TO THE EARNING OF AN EXEMPT INCOME AND HEN CE, THERE IS NO QUESTION OF DISALLOWANCE OF EXPENSES BY INVOKING PR OVISIONS OF 3 ITA NO. 6477/DEL/2019 SECTION 14A OF THE INCOME TAX ACT, 1961. THE AUTHO RITIES BELOW HAVE APPLIED RULE 8D OF INCOME TAX RULES, 1962 AND HAD MADE DISALLOWANCE TO THE TUNE OF RS. 4,74,191/- BY INVOK ING AMENDED RULE 8D(2)(II) OF THE 1962 RULES. THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIBUNAL AND MAIN GRIEVANCE OF THE ASSESSE E IS THAT THE ASSESSEE HAS NOT MADE ANY EXPENDITURE IN RELATION T O EARNING AN EXEMPT INCOME AND HAS NOT CLAIMED ANY DEDUCTION OF EXPENDITURE FROM THE REVENUE AND HENCE THERE IS NO QUESTION OF DISALLOWANCE OF EXPENDITURE. LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THIS PLEA OF THE ASSESSEE WAS NOT VERIFIED BY THE AUTHOR ITIES BELOW AND THE SAME CAN BE VERIFIED BY AUTHORITIES.. 4. THE LD. DR SUBMITTED THAT MATTER CAN BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 5. AFTER HEARING BOTH THE PARTIES THROUGH THE VIDEO CONFERENCING MODE, WE HAVE OBSERVED FROM THE PAPER BOOK FILED BY THE ASSESSEE, WHEREIN COMPUTATION OF INCOME HAVE BEEN FILED BY AS SESSEE THAT THE ASSESSEE HAS CLAIMED INCOME FROM PROFESSION OF DOCTOR WHICH IS CLAIMED UNDER THE HEAD INCOME FROM OTHER SOURCE S INSTEAD OF DECLARING THE SAME UNDER THE HEAD PROFIT OR GAIN F ROM BUSINESS OR PROFESSION. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND WE HAVE OBSERVED THAT THERE IS NO FINDING WHETHER ASSESSEE HAS CLAIMED ANY EXPENDITURE FOR WHICH DEDU CTION HAS BEEN CLAIMED FROM REVENUE. IT WILL BE FAIR AND REA SONABLE IN THE INTEREST OF JUSTICE THAT MATTER BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION AND ASSESSEE IS DIRECTED TO PRODUCE DETAILS 4 ITA NO. 6477/DEL/2019 OF INCOME EARNED FROM VARIOUS SOURCES INCLUDING FRO M PROFESSION OF DOCTOR WHICH IS DECLARED UNDER THE HEARD INCOME FROM OTHER SOURCES BY ASSESSEE AND EXPENSES CLAIMED WHILE DEC LARING THE AFORESAID INCOME(S). NEEDLESS TO SAY THAT AO WILL GIVE PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE ADJUDICATING OF DISALLOWANCE OF EXPENDITURE U/S 14A READ WITH THE RULE 8D OF THE 1962 RULES. WE ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 14.10.2020 SD/- SD/- (BHAVNESH SAINI) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14.10.2020 *KAVITA ARORA, SR. PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 6477/DEL/2019