Ramprasad Wamanrao Kadam (Bordikar), Aurangabad V. Income-tax Officer,

ITA 648/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7684 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 648/PUN/2014 / ASSESSMENT YEAR : 2009-10 SHRI RAMPRASAD WAMANRAO KADAM (BORDIKAR), C/O. HARBEL REMEDIES, C9/5, MIDC CHIKALTHANA, AURANGABAD 431 003 PAN : ACLPB3516D . / APPELLANT V/S ITO, WARD - 2(3), AURANGABAD . / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE REVENUE BY : SMT. NIRUPAMA KOTRU, CIT / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE R EVISION ORDER U/S.263 BY THE CIT, AURANGABAD, DATED 26-02-2014 FOR THE ASSESSMEN T YEAR 2009-10. 2. ASSESSEE RAISED VARIOUS GROUNDS QUESTIONING THE VALIDITY OF ORDER U/S.263 ON THE ISSUES WHICH ARE EITHER COVERED BY THE ORDER OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE OR WHICH ARE EVENTUALLY AO DID NOT MAKE AD DITION IN THE FRESH ASSESSMENT ORDER. 3. EXPLAINING THE BRIEF FACTS OF THE CASE, LD. COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS AN MLA IN MAHARASHTRA ASSEMBLY AND ASSESSEE FILED THE RETURN OF INCOME DECLARING INCOME OF RS.11,59,350/-. ASSE SSMENT WAS COMPLETED ON THE / DATE OF HEARING : 24.08.2017 / DATE OF PRONOUNCEMENT: 24.08.2017 2 ITA NO.648/PUN/2014 SHRI RAMPRASAD WAMANRAO KADAM TOTAL INCOME OF RS.13,12,463/-. ON FINDING CERTAIN DISCREPANCIES IN THE ORDER OF THE AO, THE CIT ISSUED A SHOW CAUSE NOTICE AND DIRECTED THE AO TO TAX RECEIPTS RECEIVED BY THE ASSESSEE, AN MLA, ON ACCOUNT OF CON VEYANCE ALLOWANCE, TELEPHONE ALLOWANCE AND POSTAGE AND STATIONERY. FURTHER, CIT SUGGESTED TAXING THE RENTAL RECEIPTS FROM KRUSHI VIDYALAYA AND COTTON CORPORATI ON OF INDIA. ON FINDING THAT RS.4,52,786/-, SHARE OF THE ASSESSEE RECEIVED FROM THE PARENTS, AS A LEGAL HEIR WAS NOT OFFERED TO TAX, CIT DIRECTED THE AO FOR EXAMINI NG THE TAXATION OF THE SAME TOO. 4. AGGRIEVED WITH THE ABOVE ALLEGATIONS FROM THE OR DER OF THE CIT, THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, ON THE ISSUE OF TAXABILITY OF CON STITUENCY ALLOWANCES RECEIVED ON ACCOUNT OF CONVEYANCE ALLOWANCE, TELEPHONE ALLOWA NCE AND POSTAGE AND STATIONERY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IDENTICAL ISSUE IN ASSESSEES OWN CASE CAME UP FOR ADJUDICATION BY THIS TRIBUNAL AND THE SAME WAS ALLOWED IN FAVOUR OF THE ASSESSEE. LD. COUNSEL FOR THE ASSESS EE FILED A COPY OF THE SAID ORDER OF THE TRIBUNAL FOR THE A.YRS. 2007-08 TO 2011-12 I N ITA NOS. 651 & 652/PUN/2016 ORDER DATED 28-04-2017 AND BROUGHT OUR ATTENTION TO THE GROUNDS RAISED BY THE ASSESSEE (PARA NO.3 OF THE ORDER) AND MENTIONED THA T THE TRIBUNAL EXAMINED THE PARITY OF THE ALLOWANCES RECEIVED BY THE MLAS WITH THAT OF THE MPS, APPLICABILITY OF THE PROVISIONS OF SECTION 10(17)(III), THE DEFINITI ON GIVEN TO CONSTITUENCY ALLOWANCE AND AMENITIES VIDE THE PARLIAMENT ACT, 1954 AND TH E MEMBERS OF PARLIAMENT CONSTITUENCY RULES, 1986 AND CONCLUDED THAT IN THE ABSENCE OF ANY CORRESPONDING RULES APPLICABLE TO THE MLAS, THE RULES AS APPLICAB LE TO THE MEMBERS OF PARLIAMENT ON THE ISSUE OF CONSTITUENCY ALLOWANCE AND AMENITI ES APPLIES EQUALLY TO THE MLAS. APPLYING THE SAID PRINCIPLE, AS PER THE DISC USSION GIVEN IN PARA 20 OF THE ORDER, IN ASSESSEES OWN CASE, RELIEF IS GRANTED TO THE ASSESSEE. THE AO WAS DIRECTED BY THE TRIBUNAL TO DELETE THE SAID ADDITIO NS. LD. COUNSEL, THEREFORE, PRAYED FOR REVERSING THE ORDER OF THE CIT. 3 ITA NO.648/PUN/2014 SHRI RAMPRASAD WAMANRAO KADAM 6. LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HEAVILY RELIED ON THE ORDER OF THE CIT. 7. WE HEARD BOTH THE SIDES ON THE ISSUE OF TAXING T HE CONSTITUENCY ALLOWANCES RECEIVED BY THE ASSESSEE, AN MLA ON ACCOUNT OF CONV EYANCE ALLOWANCE, TELEPHONE ALLOWANCE AND POSTAGE & STATIONERY. WE FIND THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 651 & 562/PUN201 6 FOR THE A.YRS. 2007-08 TO 2011-12 ORDER DATED 28-04-2017 HAS ALLOWED THE IDEN TICAL ISSUE IN FAVOUR OF THE ASSESSEE. FOR THE SAKE OF COMPLETENESS, WE PROCEED TO EXTRACT THE RELEVANT PARA FROM THE SAID ORDER WHICH READS AS UNDER : 20. NOW APPLYING THE SAID PRINCIPLE TO THE ALLOWAN CES RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, WHEREIN THE AS SESSEE HAD RECEIVED CONSOLIDATED ALLOWANCE OF RS.18,000/-, TELEPHONE AL LOWANCE OF RS.96,000/- AND POSTAGE AND STATIONERY OF RS.90,000/-. THE TWO ALL OWANCES, I.E. TELEPHONE ALLOWANCES AND POSTAGE AND STATIONERY ALLOWANCES AT RS.96,000/- AND RS.90,000/- RESPECTIVELY ARE CONSTITUENCY ALLOWANCE, WHICH ARE EXEMPT UNDER SECTION 10(17)(III) OF THE ACT. HOWEVER, THE CONSOLIDATED ALLOWANCE OF RS.18,000/- IS NOT A PART OF CONSTITUENCY ALLOWANCE AND HENCE IS TO BE ADDED AS INCOME IN THE HANDS OF ASSESSEE. THE ASSESSEE HAS FAILED TO ESTABLISH HOW IT IS COVERED AS CONSTITUENCY ALLOWANCE. THE ASSESSING OFFICER IS THUS DIRECTED ACCORDINGLY. 8. THUS, FROM THE ABOVE, WE FIND IT IS A COVERED MA TTER IN FAVOUR OF THE ASSESSEE. THE PROPOSAL OF THE CIT WITH REGARD TO T HE TAXATION OF CONVEYANCE ALLOWANCE, TELEPHONE ALLOWANCE AND POSTAGE AND STAT IONERY EXPENDITURE RECEIVED BY THE MLA FALLS WITHIN THE DEFINITION OF CONSTITU ENCY ALLOWANCE AND AMENITIES. THEREFORE, WE ARE OF THE OPINION THAT THE DIRECTION OF THE CIT ON THIS ASPECT IS UNSUSTAINABLE IN LAW BY THE AO. WE ARE OF THE VIEW THAT IT IS NOT A CASE OF ANY ERRONEOUS ASSUMPTION OF LAW OR A FACT. CONSEQUENTL Y, THE DIRECTION OF THE CIT ON THIS ISSUE IS WITHOUT ANY JURISDICTION U/S.263 OF T HE ACT. ACCORDINGLY, WE ORDER. 9. COMING TO THE OTHER RECOMMENDATIONS OF CIT WITH REGARD TO TAXATION OF RENTAL INCOME OF RS.84,175/- AND SHARE INCOME OF RS .4,52,786/-, IT IS THE ARGUMENT OF THE LD. COUNSEL THAT THE SAID RECOMMENDATIONS WE RE NOT FOUND VALID BY THE AO. 4 ITA NO.648/PUN/2014 SHRI RAMPRASAD WAMANRAO KADAM THE FRESH ASSESSMENT ORDER OF THE AO PASSED U/S.143 (3) R.W.S. 263 OF THE ACT DO NOT REFER TO MAKING ANY ADDITIONS ON THESE ACCOUNTS . IN SUPPORT OF THE SAME, ASSESSEE FILED THE FRESH ASSESSMENT ORDER DATED 27- 03-2015. 10. WE HEARD BOTH THE PARTIES. ON EXAMINING THE FR ESH ASSESSMENT (SUPRA), SO FAR AS THESE TWO ISSUES ARE CONCERNED, THE ORIGINAL ORDER OF THE AO IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE AS THERE IS NO LOSS OF REVENUE. ACCORDINGLY, ON THESE TWO ACCOUNTS ALSO, THE RECOMMENDATIONS OF THE CIT ARE UNSUSTAINABLE IN LAW AS IT IS A CASE OF NEITHER ERRONEOUS ASSUMPTION OF LAW OR A FACT. THEREFORE, THE REVISION ORDER PASSED BY THE CIT U/S.263 OF THE ACT IS WITHOUT ANY JURISDICTION ON THESE TWO ISSUES TOO. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF AUGUST, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 24 TH AUGUST, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT, AURANGABAD 4. % , , B BENCH PUNE; 5. / GUARD FILE.