Hari Shankar Modi, Kolkata V. ITO,WD-7(1), KOLKATA, Kolkata

ITA 649/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9626 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2016
• Court: TRIBUNAL
• Department Lawyers: RAJAT KR KUREEL
• Assessee Lawyers: BISHNU KANT AGARWAL
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ./ ITA NO.649/KOL/2016 ( / ASSESSMENT YEAR:2009-2010) HARI SHANKAR MODI 24 MADAN MOHAN TOLLA STREET, KOLKATA-700005 VS. ITO WARD 7(1) AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA ./ ./PAN/GIR NO. : AELPM0041G ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI BISHNU KANT AGARWAL REVENUE BY : SHRI RAJAT KR. KUREEL, JCIT / DATE OF HEARING : 30/12/2016 /DATE OF PRONOUNCEMENT 04/01/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO ASSESSMENT YEAR 2009-10, IS DIRECTED AGAINST THE OR DER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-16, KOLKATA, I N APPEAL NO.406/CIT(A)-16/KOL/2014-15/W-7(1), DATED 09.02.20 16, WHICH IN TURN ARISES OUT OF ASSESSMENT ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 29.09.2011. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED RETURN OF INCOME ON 24.09.2009 DECLARING TOTAL INCO ME OF RS.11,39,230/-. THE ASSESSEE`S CASE WAS SELECTED FOR SCRUTINY U/S 1 43(3) OF THE ACT AND ASSESSING OFFICER COMPLETED THE ASSESSMENT BY MAKIN G ADDITION OF MEDICAL INSURANCE RECEIPT OF RS.2,41,767/-. THE ASS ESSEE HAD RECEIVED A SUM OF RS.2,41,767/-AS REIMBURSEMENT OF EXPENSES IN CURRED IN RELATION TO A SURGERY OF GALL BLADDER BY NEW INDIA INSURANCE CO MPANY UNDER MEDICAL INSURANCE POLICY. ASSESSING OFFICER OBSERVED THAT T HE AMOUNT OF INSURANCE ITA NO.649/KOL/2016 HARI SHANKAR MODI 2 RECEIPT OF RS.2,41, 767/- ON ACCOUNT OF MEDICAL, IS AN INCOME U/S 2(24) OF THE INCOME TAX ACT AND SINCE NO EXPRESS EXEMPTION I S GRANTED UNDER ANY PROVISIONS OF THE ACT THEREFORE, IT IS CHARGEABLE T O TAX. 3. AGGRIEVED FORM THE ORDER OF THE ASSESSING OFFICE R, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX , WHO HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER OBSERVING THE FO LLOWINGS: 3.I HAVE GONE THROUGH THE PROVISIONS OF SECTION 80D AND SECTION 10D.PROVISION HAS BEEN MADE FOR DEDUCTION IN RESPEC T OF HEALTH INSURANCE PREMIUM. THERE IS NOTHING IN THE PROVISION OF SECTI ON 10D TO HELP THE ASSESSEE HOW REIMBURSEMENT FROM INSURANCE COMPANY I S NOT TAXABLE. 4. HENCE, THE ADDITION OF THE A.O. IS SUSTAINED AND T HE APPEAL OF THE ASSESSEE IS DISMISSED. 4. NOT BEING SATISFIED WITH THE ORDER OF THE LD.CIT (A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL: 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD CIT(A) ERRED IN CONFIRMING THE ORDER OF THE LEARNED INCOME TAX OFFICER. 2.THAT ON THE BASIS OF THE FACTS OF THE CASE AND IN LAW, THE LEARNED INCOME TAX OFFICER ERRED IN TREATING REIMBURSEMENT OF MEDICAL EXPENSES UNDER MEDICAL INSURANCE POLICY AS INCOME CHARGEABLE TO TAX AND MAKING AN ADDITION OF RS.2,41,767/- ON ACCOUNT OF THE SAID REIMBURSEMENT. 4.1 LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT ASSE SSING OFFICER WRONGLY TREATED REIMBURSEMENT OF MEDICAL EXPENSES UNDER THE MEDICAL INSURANCE POLICY AS INCOME CHARGEABLE TO TAX. REIMBURSEMENT O F EXPENSES CANNOT TAKE A CHARACTER OF INCOME. SECTION 2(24) OF THE I. T. ACT DEFINES THE TERM INCOME IN AN INCLUSIVE WAY, BUT REIMBURSEMENT OF EXPENSES CANNOT BE INCOME BECAUSE THE ASSESSEE IS GETTING THE MONEY BA CK, WHICH HE ALREADY SPENT. ASSESSEE DID NOT EARN THIS MONEY AT ALL WHICH HE IS GETTING AS REIMBURSEMENT. REIMBURSEMENT DOES NOT MEAN THAT THE ASSESSEE IS ITA NO.649/KOL/2016 HARI SHANKAR MODI 3 DERIVING ANY INCOME FROM ANY SALE OF GOODS AND SER VICES. THERE IS NO MOTIVE TO EARN INCOME OUT OF MEDICAL INSURANCE. 4.2 ON THE OTHER HAND, THE LD DR FOR THE REVENUE HA S PRIMARILY RELIED ON THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA, AND THE SAME IS NOT BEING REPEATE D FOR THE SAKE OF BREVITY. 4.3 HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN T HE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY THE LD.A R FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. AS THE LD AR POINTED OUT THAT REIMBURSEMENT DOES NOT MEAN THAT THE ASSES SEE IS DERIVING ANY INCOME FROM ANY SALE OF GOODS AND SERVICES. WHAT T HE ASSESSE SPENT, IS GETTING BACK BY WAY OF REIMBURSEMENT, IS NOT AN INC OME. THE TERM INCOME HAS BEEN DEFINED BY LAW DICTIONARY AS FOLL OWS: THE BLACK`S LAW DICTIONARY DEFINES THE INCOME AS THE MONEY OR OTHER FORM OF PAYMENT THAT ONE RECEIVES, USUALLY PERIODIC ALLY, FROM EMPLOYMENT, BUSINESS, INVESTMENTS, ROYALTIES, GIFTS AND THE LIK E. PUNJAB & HARYANA HIGH COURT IN THE CASE OF SAT PAL AND CO. V/S EXCISE AND TAXATION COMMISSIONER 185 ITR 375 [1990] DEFINED THE INCOME AS FOLLOWS: THE INCOME-TAX ACT DEFINES THE EXPRESSION INCOME IN CLAUSE 24 OF SECTION 2, BUT THAT DEFINITION CAN NOT BE READ BACK INTO ENTRY 82 OF LIST 1 OF THE SEVENTH SCHEDULE TO THE CONSTITUTION. EVEN THE SAID DEFINITION IS AN INCLUSIVE ONE AND HAS BEEN EXPANDING FROM TIME TO T IME. SEVERAL ITEMS HAVE BEEN BROUGHT WITHIN THE DEFINITION FROM TIME T O TIME BY VARIOUS AMENDING ACTS. THE SAID DEFINITION CANNOT, THEREFOR E, BE READ AS EXHAUSTIVE OF THE MEANING OF THE EXPRESSION INCOME OCCURRING IN ENTRY 82 OF LIST 1 IN THE SEVENTH SCHEDULE. THIS, OF COURSE, DOES NOT MEAN THAT AN AMOUNT WHICH CAN, BY NO STRETCH OF IMAGINATION, BE CALLED INCOME CAN BE TREATED AS INCOME AND TAXED AS SUCH BY PARLIAMENT. IT MUST HAVE SOME CHARACTERISTICS OF INCOME AS BROADLY UNDERSTOOD. SO LONG AS THE AMOUNT TAXED AS INCOME CAN RATIONALLY BE CALLED INCOME AS GENERALLY UNDERSTOOD, IT IS COMPETENT FOR THE PARLIAMENT TO CALL IT INCOM E AND LEVY TAX THEREON. (SECTION 44AC AND 206C) ITA NO.649/KOL/2016 HARI SHANKAR MODI 4 AFTER GOING THROUGH THE DEFINITION OF THE INCOME, A S EXPLAINED ABOVE, ONE CAN SAY EASILY THAT THE REIMBURSEMENT IS NOT AN I NCOME. THE TERM REIMBURSEMENT DOES NOT FALL IN THE CHARACTERISTIC S OF INCOME. NO DOUBT THE DEFINITION OF INCOME IS INCLUSIVE. THIS, OF C OURSE, DOES NOT MEAN THAT AN AMOUNT WHICH CAN, BY NO STRETCH OF IMAGINATION, BE CALLED INCOME CAN BE TREATED AS INCOME AND TAXED AS SUCH BY PARLIAMEN T. IT MUST HAVE SOME CHARACTERISTICS OF INCOME AS BROADLY UNDERSTOOD. BASED ON THE ABOVE ANALYSIS OF THE TERM INCOME, W E ARE OF THE VIEW THAT ADDITION MADE BY ASSESSING OFFICER AND CONFIRMED BY LD.CIT(A) NEEDS TO BE DELETED. ACCORDINGLY, WE DELETE THE ADDITION. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 04/01 /2017. S D/ - (A.T.VARKEY) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 04/01/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT- HARI SHANKAR MODI 2. / THE RESPONDENT.-ITO WARD-7(1), KOLKATA 3. 1 ( ) / THE CIT(A), 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//