Shraddha Jain, New Delhi V. ACIT, New Delhi

ITA 6673/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6762 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 10-02-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 16-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KR CHOPRA
• Assessee Lawyers: D B JAIN
• Keywords: Opportunity of being heard; Capital receipt
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-1 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-6673/DE L/2015 (ASSESSMENT YEAR-2012- 13) SHRADDHA JAIN, 4239-A/2, 1-ANSARI ROAD, DARYA GANJ, NEW DELHI-110002. PAN-ANHPJ2148N (APPELLANT) VS ACIT, CIRCLE-52(3), NEW DELHI (RESPONDENT) APPELLANT BY SH.D.B.JAIN, CA RESPONDENT BY SH.MANOJ KR. CHOPRA, SR. DR ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 13.10.2015 OF CIT(A) -XVIII, NEW DELHI PERTAINING TO 2012-13 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS GROSSLY ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE OR DER OF ASSESSMENT DETERMINING THE TOTAL INCOME OF THE APPELLANT AT RS . 11,25,050/- AGAINST THE RETURNED INCOME OF RS. 4,15,041/-, DESP ITE THE FACT THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN PAR A 5.6 HAS OBSERVED THAT RS. 7,10,014/- WAS RIGHTLY ASSESSED I N THE ASSESSMENT YEAR 2014-2015. HE THUS OUGHT TO HAVE DELETED THE A DDITION OF RS. 7,10,014/- I.E. RS. 3,62,547/- AND RS. 3,47,468/~ B EING RENT AND INTEREST ON UNPAID RENT. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS FURTHER ERRED IN HOLDING THAT IN THE INCOME OFFERED BY THE ASSESSEE OF RS. 4,15,041/- (A SUM OF RS. 78,891/- REPRESENTING THE AMOUNT OF TAX DEDUCTED AT SOURCE I.E., RS. 40,283/- TOWARDS RENT AND RS. 38,608/- BY WAY OF INTEREST) THOUGH HAS BEEN TAXED YET NO CREDI T OF THE SAID SUM COULD BE ALLOWED TO HER, DESPITE THE FACT THE ASSES SING OFFICER HAD GRANTED SUCH CREDIT OF TAX DEDUCTED AT SOURCE. 3. THAT ON THE AFORESAID FINDINGS OF THE COMMISS IONER OF INCOME TAX (APPEALS) THUS THE SAID SUM OF RS. 78,891/- COULD N OT HAVE BEEN ASSESSED TO TAX AS THE INCOME OF THE ASSESSMENT YEA R 2012-2013 AND OUGHT TO HAVE BEEN EXCLUDED FROM THE TOTAL INCOME O F THE ASSESSEE. DATE OF HEARING 10.02.2016 DATE OF PRONOUNCEMENT 25.02.2016 I.T.A .NO.-6673/DEL/2015 PAGE 2 OF 6 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS FURTHER FAILED TO APPRECIATE THAT THE DEDUCTOR BEING THE TE NANT, HAD DEDUCTED THE TAX AT SOURCE IN THE FINANCIAL YEAR 2011-2012 O F RS. 78,891/- (WHICH SUM HAS BEEN INCLUDED BY THE ASSESSEE AS HER INCOME FOR THE ASSESSMENT YEAR 2012-2013) HAD RIGHTLY BEEN GIVEN C REDIT OF TAX DEDUCTED AT SOURCE, SHOULD HAVE DIRECTED THE CREDIT BE GIVEN OF SUCH TAX DEDUCTED AT SOURCE. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FAILED TO CONSIDER THAT RULE 37 BA (3) OF THE INCOM E TAX RULES, 1962 COULD NOT OVERRIDE THE PROVISIONS OF SECTION 199 OF THE ACT AND THUS THE CREDIT OF TDS, IN RESPECT OF WHICH INCOME HAS BEEN ASSESSED TO TAX, WAS REQUIRED TO BE ALLOWED TO THE ASSESSEE SINCE ON THE FIRST PRINCIPLE, THE AMOUNT OF TDS REPRESENTED THE AMOUNT OF INCOME OF THE ASSESSEE AND WAS SO ASSESSABLE IN THAT ASSESSMENT YEAR AND A S SUCH CREDIT OF TAX DEDUCTED AT SOURCE SHOULD BE GRANTED TO THE ASS ESSEE. 6. FURTHER THE LEVY OF INTEREST U/S 234B OF THE INC OME TAX ACT, 1961 IS ALSO IN DISREGARD OF THE FACT THAT THE TAX HAD BEEN DEDUCTED AT SOURCE AND SUCH AMOUNT OF TDS COULD NOT HAVE BEEN D ISREGARDED, WHILE COMPUTING THE INTEREST LEVIABLE UNDER ANY OF THE PROVISION OF THE INCOME TAX ACT. IT IS THEREFORE PRAYED THAT THE ADDITION SUSTAINED OF RS. 7,10,014/- DIRECTED TO BE DELETED. IT BE FURTHER HE LD THAT THE AMOUNT OF TAX DEDUCTED AT SOURCE OF RS. 78,891/- BE GRANTED TO THE ASSESSEE AND NO INTEREST U/S 234B OF THE INCOME TAX ACT, 1961 WAS THUS LEVIABLE. (EMPHASIS PROVIDED) 2. AT THE TIME OF HEARING, THE LD.AR INITIALLY SOUG HT A PASS OVER. HOWEVER, CONSIDERING THE ARGUMENTS OF THE LD. SR. DR ON THE BASIS OF THE QUERIES RAISED ON THE FINDINGS ARRIVED AT IN THE IMPUGNED ORDER WH EREIN THE RELEVANT FACTS WERE POINTED OUT BY HIM IT WAS CONSIDERED APPROPRIATE TO REJECT THE ORAL PRAYER. IT IS SEEN THAT IN THE YEAR UNDER CONSIDERATION THE ASSES SEE RETURNED AN INCOME OF RS.4,15,041/- WHEREIN THE SOURCE OF INCOME WAS DECL ARED UNDER THE HEADS INCOME OF HOUSE PROPERTY AND OTHER SOURCES. TH E ASSESSEE WAS REQUIRED TO RECONCILE THE INCOME FROM TDS DEDUCTED WITH INCOME DECLARED IN THE COMPUTATION OF INCOME FILED FOR THE YEAR UNDER CONS IDERATION. THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS NOTICED THAT THERE WAS A DIFFERENCE OF INCOME DECLARED BY THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES AS PE R THE FORM 26AS. UNDER I.T.A .NO.-6673/DEL/2015 PAGE 3 OF 6 THE HEAD INCOME FROM HOUSE PROPERTY THE ASSESSEE HAD DECLARED RENTAL INCOME OF RS.40,283/- FROM GOODYEAR INDIA LTD., HOWEVER AS PER THE FORM 26AS, TDS OF RS.40,283/- HAD BEEN DEDUCTED ON THE INCOME OF RS.4 ,02,830/-. THE ASSESSEE HAD ALSO DECLARED THE INTEREST INCOME RECEIVED FROM GOODYEAR INDIA LTD. OF RS.38,608/- WHEREAS AS PER THE FROM 26AS THE INTERE ST HAD BEEN RECEIVED AMOUNTING TO RS.3,86,075/-. 2.1. ACCORDINGLY THE ASSESSEE WAS ASKED TO SHOW CAU SE WHY THE DIFFERENCE OF RS.3,62,547/- ON ACCOUNT OF RENT RECEIPT AND RS.3,4 7,467/- ON ACCOUNT OF INTEREST RECEIVED SHOULD NOT BE DISALLOWED AND ADDE D TO THE TAXABLE INCOME OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 2.2. IN RESPONSE TO THE SAID QUERY, THE ASSESSEE IS FOUND TO HAVE GIVEN THE FOLLOWING SUBMISSIONS BY LETTER DATED 13.01.2015 BE FORE THE AO:- ' ASSESSEES GRANDFATHER (NANA) EXPIRED ON 02-12-19 95 LEAVING BEHIND HIM A DISPUTE WITH GOODYEAR INDIA LTD. TO WHOM HE H AD LET OUT CERTAIN PROPERTIES ON RENT DURING HIS LIFETIME. AFTER HIS D EMISE THE SAID PROPERTY WAS VACATED BY M/S GOODYEAR INDIA LIMITED BY A COUR T ORDER. THE COURT FURTHER GRANTED CERTAIN COMPENSATION AS ADDIT IONAL RENT TO BE PAID AND INTEREST ON THE ADDITIONAL RENT. HOWEVER, THERE WAS A DISPUTE BETWEEN THE LEGAL HEIRS REGARDING THE DISTRIBUTION OF RENT & INTEREST THEREON AND THE MATTER WAS REFERRED TO THE COURTS I N EXECUTION PETITION. DURING THE YEAR UNDER CONSIDERATION M/S GOODYEAR IN DIA LTD, DEPOSITED AN AMOUNT OF RENT & INTEREST IN THE COURT S OUT OF WHICH A SUM OF RS.3,62,547/- WAS DEPOSITED ON ACCOUNT OF RE NT TO THE SHARE OF THE ASSESSEE AND RS.3,47,467/- ON ACCOUNT OF INTERE ST TO THE SHARE OF THE ASSESSEE. M/S GOODYEAR INDIA LTD. ALSO DEDUCTED TAX AT SOURCE AMOUNTING-TO RS.4,283/- & RS.38,608/- RESPECTIVELY OUT OF AFORESAID SUMS AND DEPOSITED THE SAME WITH THE DEPARTMENT. TH ESE AMOUNTS OF TAX DEDUCTED AT SOURCE ARE ALSO APPEARING IN FROM 2 6AS. SINCE THE DISPUTES WITH RESPECT TO THE AMOUNTS BELO NGING TO THE ASSESSEE WERE PENDING IN THE COURTS, ASSESSEE COULD NOT CLAIM THE AFORESAID SUMS AS ITS INCOME FOR THE YEAR UNDER CON SIDERATION.' 2.3. NOT CONVINCED WITH THE EXPLANATION OFFERED, TH E AO CONCLUDED AS UNDER:- THE SUBMISSION MADE BY THE ASSESSEE HAS BEEN CONSI DERED AND FOUND UNTENABLE BECAUSE OF THE INCOME ARISES/RECEIVED IN THE AY 2012-13 AS PER THE COURT ORDER AND THE TDS WAS DEDUCTED ON THE INCOME. THE ASSESSEE HAS ADMITTED ITSELF THAT IT HAS RECEIVED T HE AMOUNT. THE ASSESSEE HAS ALSO MADE THE CLAIM OF TDS. SINCE THE ASSESSEE HAS NOT I.T.A .NO.-6673/DEL/2015 PAGE 4 OF 6 SHOWN INCOME, I THEREFORE THE AMOUNT OF RS.3,62,547 IS ADDED BACK UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND RS.3, 47,467/- UNDER THE HEAD INCOME FROM OTHER SOURCES. PENALTY PROCEED INGS U/S 271(1)(C) IS INITIATED SEPARATELY. ADDITION (362547+347467=7,10,014/-) 3. AGGRIEVED BY THIS, THE ASSESSEE CAME IN APPEAL B EFORE THE FIRST APPELLATE AUTHORITY. AFTER TAKING NOTE OF THE LITIGATION PEN DING BEFORE THE COURTS THE CIT(A) IS FOUND TO HAVE CONCLUDED THE ISSUE IN THE FOLLOWING MANNER:- IN THE LIGHT OF THE ABOVE, THE ASSESSING OFFICER I S DIRECTED TO WITHDRAW THE CREDIT OF TDS, IF AT ALL GIVEN IN THE ASSESSMEN T AND CONSIDER THE SAME AS AND WHEN IT IS OFFERED AS INCOME IN THE FUT URE ASSESSMENTS. 3.1. THE LD. SR. DR WAS REQUIRED TO POINT OUT AS TO HOW THE ORDER COULD BE CONSIDERED TO BE A SPEAKING ORDER ON THE ISSUES IN VOLVED AS THE ASSESSEE BEFORE THE CIT(A) IS FOUND TO HAVE RAISED THE FOLLOWING GR OUNDS AS ARE FOUND EXTRACTED IN PAGE 2 OF THE IMPUGNED ORDER:- 1. THAT THE ORDER OF THE INCOME TAX OFFICER, WA RD - 52(3), NEW DELHI IS AGAINST LAW AND FACTS PLACED ON RECORD AND THAT THE ASSESSING OFFICER HAS ERRED IN ASSESSING INCOME OF THE ASSESS ES AT RS.11,25,050/- AS AGAINST THE RETURNED INCOME OF RS . 4,15,041/-. 2, THAT THE LEARNED ASSESSING OFFICER HAS ERRED I N HOLDING IN THE ORDER OF ASSESSMENT THE INCOME ARISES/RECEIVED DURI NG ASSESSMENT YEAR 2012-13 WHICH IS ENTIRELY MISCONCEIVED AND AGA INST THE SPIRITS OF LAW, ESPECIALLY SECTION 25B OF THE INCOME TAX ACT, 1961 WHICH PROVIDES THAT DELAYED AMOUNTS OF RENT WHEN RECEIVED SHALL BE LIABLE TO TAX. SINCE THE SAID AMOUNT HAS NOT BEEN RECEIVED DURING THE YE AR SAME IS NOT TAXABLE IN THE ASSESSMENT YEAR 2012-13. 2.1. THAT WITHOUT PREJUDICE, THE LEARNED ASSESSING OFFICER HAS ERRED IN ASSESSING THE SUM RS.3,62.5477- ON ACCOUNT OF RENT TO THE SHARE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION ON THE ON E HAND AND ON THE OTHER HANDS HAS FURTHER ERRED IN NOT ALLOWING THE D EDUCTION ALLOWABLE TO THE ASSESSEE UNDER THE PROVISIONS OF SECTION 24 OF THE INCOME TAX ACT, 1961. 3. THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN ASSESSING A SUM OF RS.3,47,467/- AS INCOME FROM OTHER SOURCES WITHO UT APPRECIATION THAT THE SAID AMOUNT IS A CAPITAL RECEIPT AS THE SA ME AMOUNT IS RECEIVABLE FOR DEPRIVATION OF USE OF THE PROPERTY W HICH IS CAPITA! AMOUNT. 3.1. THAT IN ANY CASE INTEREST FOR DEPRIVATION OF USE OF PROPERTY CAN ONLY BE TAXED IN THE YEAR OF RECEIPT AS PER LAW AND THE SAID AMOUNT HAS NOT BEEN RECEIVED DURING THE YEAR UNDER CONSIDERATI ON, AS SUCH THE SAID AMOUNT CANNOT BE TAXED IN THE ASSESSMENT YEAR 2012-13. 4. THAT THE LEARNED ASSESSING OFFICER HAS ERRED M LEVYING INTEREST U/S 234B OF THE INCOME TAX ACT, 1961 OF RS.18,360/~. I.T.A .NO.-6673/DEL/2015 PAGE 5 OF 6 5. THAT THE LEARNED ASSESSING OFFICER HAS ER RED IN WITHDRAWING INTEREST OF RS.12,298/- U/S 271 (I)(C) OF THE INCOM E TAX ACT, 1961. 6. THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN INITIATING THE PENALTY PROCEEDINGS U/S 271(1) (C) OF THE INCO ME TAX ACT, 1961. IT IS THEREFORE PRAYED THE ADDITIONS AND DISALLOWAN CES MADE TO THE RETURNED INCOME BE DELETED AND THE PENALTY PROCEEDI NGS BE DROPPED AND THE INTEREST LEVIED U/S 234B AND U/S 234B OF TH E INCOME TAX ACT, 1961 BE DELETED IN ACCORDANCE WITH LAW. 3.2. THE LD. SR.DR STATED THAT ALTHOUGH THE CIT(A) HAS NOT DECIDED THE ISSUES GROUND-WISE HOWEVER, AS COULD BE UNDERSTOOD BY HIM PROBABLY ON THE GROUNDS RAISED RELIEF HAS ALREADY BEEN GRANTED TO THE ASSES SEE. IN SUPPORT OF THE SAID SUBMISSION, ATTENTION WAS INVITED TO THE FOLLOWING OBSERVATIONS MADE AT PAGE 11 OF THE IMPUGNED ORDER WHEREIN AFTER REPRODUCTION OF THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A HAS MADE REFERENCE TO SOME CONC LUSION DRAWN BY HIM:- IN THIS CONNECTION, THE ASSESSEE HAS MADE A CONTEN TION THAT EVEN IF IT IS HELD THAT THE AMOUNT IS ASSESSABLE IN THE CURREN T YEAR, THE ASSESSING OFFICER OUGHT TO GIVE ALLOWANCE OF 30% AS PER THE P ROVISIONS OF SECTION 25B. THE CLAIM IS REASONABLE AND JUST, BUT IN VIEW OF MY DECISION THAT THE AMOUNT IS NOT TO BE ASSESSED IN THE CURRENT YEAR, THE MATTER REMAINS ACADEMIC. (EMPHASIS PROVIDED) 3.3. HOWEVER, ON READING THE ABOVE HE MADE EFFORTS TO FIND OUT WHERE SUCH A CONCLUSION HAD BEEN DRAWN. FINALLY GIVING UP IT WA S HIS SUBMISSIONS THAT ALTHOUGH IT APPEARS THAT THE ADDITION HAS NOT BEEN SUSTAINED HOWEVER, IN THE FACE OF THE ASSESSEES GRIEVANCE IT DOES APPEAR THA T THE FINDING IN THE IMPUGNED ORDER IS AMBIGUOUS. THE ARGUMENTS OF THE LD. AR O N THE OTHER HAND WAS THAT THE ISSUES HAVE NOT BEEN CONSIDERED GROUND-WISE BY THE CIT(A) AND THE ORDER IS AMBIGUOUS AND CONFUSING WHICH POSITION WAS ALSO NOT DISPUTED BY THE LD. SR.DR. 4. ACCORDINGLY, ON A CONSIDERATION OF THE MATERIAL AVAILABLE ON RECORD AND IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH, I AM OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE NECESSARY I.T.A .NO.-6673/DEL/2015 PAGE 6 OF 6 TO SET ASIDE THE IMPUGNED BACK TO THE FILE OF THE C IT(A). THE LD. CIT(A) IS DIRECTED TO DECIDE THE SAME DENOVO GROUND-WISE, BRINGING OUT CLEARLY THE CONCLUSION AFTER SETTING OUT THE REASONING FOR THE CONCLUSION DRAWN SO AS TO ENABLE THE AFFECTED PARTY TO ASSAIL ITS CORRECTNESS IF SO WARRANTED ON FACTS. THE CONCLUSION WITHOUT A RELEVANT DISCUSSION SETTING OU T THE REASONING FOR THE CONCLUSION CANNOT STAND JUDICIAL SCRUTINY. IN VIE W OF THE ABOVE, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES AND THE ISSUES ARE RESTORED BACK TO THE FILE TO THE CIT(A) WITH THE DI RECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 25 TH OF FEBRUARY, 2016. SD/- (DIVA SINGH) JUDI CIAL MEMBER DATED: 25/02/2016 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTAN T REGISTRAR ITAT NEW DELHI