Shri Narendrasinh D. Vala, Bhavnagar V. The Income Tax Officer, Ward-1(3), Bhavnagar

ITA 722/AHD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8459 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 23-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N P PATEL
• Assessee Lawyers: ROHAN N POPAT
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 722/AHD/2016 (ASSESSMENT YEAR: 2010-11) SHRI NARENDRASINH D. VALA DEVAT KRUPA, SHIVAJI NAGAR, TALAJA, DIST. BHAVNAGAR - 364145 APPELLANT VS. THE INCOME-TAX OFFICER, WARD 1(3), BHAVNAGAR RESPONDENT PAN: ABGPV3150R & ITA NOS. 723 TO 725/AHD/2016 (ASSESSMENT YEAR S: 2009-10 TO 2011-12) SHRI DHARMENDRASINH G. GOHIL, 3/B-1, SHIVADITYA, OPP. BPTI, ANANTWADI, BHAVNAGAR APPELLANT VS. THE INCOME-TAX OFFICER, WARD 1(3), BHAVNAGAR RESPONDENT PAN: AAPPG9258D /BY ASSESSEE : SHRI ROHAN N. POPAT, A.R. /BY REVENUE : SHRI N. P. PATEL, SR. D.R. ITA NOS. 722 TO 725/AHD/16 (SHRI NARENDRASINH D. VA LA & SHRI DHARMENDRASINH G. GOHIL VS. ITO) - 2 - /DATE OF HEARING : 07.09.2017 /DATE OF PRONOUNCEMENT : 12.09.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS SET OF FOUR CASES PERTAINS TO TWO DIFFERENT AS SESSEES SHRI NARENDRA D. VALA AND SHRI DHARMENDRASINH G GOHIL. FORMER AS SESSEE HAS INSTITUTED ITA NO. 722/AHD/2016 FOR ASSESSMENT YEAR 2010-11 AG AINST THE CIT(A)-6, AHMEDABADS ORDER DATED 15.12.2015 IN CASE NO. CIT( A)-6/179/14-15, CONFIRMING ASSESSING OFFICERS ACTION INITIATING RE OPENING THEREBY DISALLOWING HIS EXPENSES CLAIM OF RS.2,60,268/- FRO M INCENTIVE BONUS RECEIVED FROM THE LIFE INSURANCE CORPORATION OF IND IA. 2. LATTER ASSESSEE HAS FILED HIS THREE APPEALS FOR ASSESSMENT YEARS 2009-10 TO 2011-12 AGAINST THE VERY CIT(A)S COMMON ORDER OF THE SAME DATE IN CASES NOS. CIT(A)-6/322/14-15, CIT(A)-6/321/14-15 & CIT(A)-6/320/14-15, UPHOLDING VALIDITY OF REOPENING FOLLOWED BY SIMILAR EXPENDITURE DISALLOWANCE OF RS.1,80,800/- 2,87,695/- AND RS.3,1 2,500/-; RESPECTIVELY FOLLOWED BY HIS ACTION RESTRICTING DISALLOWANCE OF CONVEYANCE EXPENDITURE OF RS.52,566/- TO THAT @ 50% COMING TO RS.26,283/- IN FIRST ASSESSMENT YEAR HEREINABOVE; RESPECTIVELY. RELEVANT PROCEEDINGS I N ALL THESE CASES ARE U/S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN S HORT THE ACT. ITA NOS. 722 TO 725/AHD/16 (SHRI NARENDRASINH D. VA LA & SHRI DHARMENDRASINH G. GOHIL VS. ITO) - 3 - HEARD BOTH SIDES. CASE FILE PERUSED. 3. WE ADVERT TO FIRST COMMON ISSUES IN ALL THESE AP PEALS RELATING TO VALIDITY OF REOPENING. BOTH THESE ASSESSEES ARE AD MITTEDLY EMPLOYED AS DEVELOPMENT OFFICERS IN THE LIFE INSURANCE CORPORAT ION OF INDIA. THEY HAD CLAIMED THE ABOVE EXPENSES COMING TO 30% OF THE INC ENTIVE BONUS RECEIVED FROM THE ABOVE CORPORATION ALONGWITH CONVEYANCE ALL OWANCES. THE ASSESSING OFFICER INITIATED REOPENING IN THEIR CASE S ON THE GROUND THAT HONBLE APEX COURTS DECISION IN GURUDEV SINGH JAGG I VS. CIT SLP (CIVIL) NO. 22350 OF 2003 DECIDED ON 17.11.2003 (ARISING FR OM HONBLE M.P. HIGH COURTS DECISION IN ITA NO.56/2000 DATED 09.05.2003 ) HAD OBSERVED THAT HONBLE JURISDICTIONAL HIGH COURTS DECISIONS IN CI T VS. KIRANBHAI H SHELAT (1999) 235 ITR 635 (GUJ) WAS WRONG. HE THEREAFTER FRAMED IMPUGNED CONSEQUENTIAL RE-ASSESSMENT ON 27.01.2015 IN FORMER ASSESSEES CASE AND ON 30.01.2015 IN LATTER ASSESSEES CASES; RESPECTIVELY . THE CIT(A) UPHOLDS THE SAME IN HIS ORDERS UNDER CHALLENGE EXCEPT TO THE EX TENT THAT HE HAS RESTRICTED CONVEYANCE EXPENDITURE DISALLOWANCE (SUPRA) TO 50%. 4. BOTH THE LEARNED REPRESENTATIVES REFER TO THE CA SE FILE CONTAINING A CO- ORDINATE BENCH ORDER IN LATTER ASSESSEE BASE FOR AS SESSMENT YEARS 2006-07 TO 2008-09 ITA NOS. 2771 TO 2773/AHD/2014 DECIDED ON 1 9.05.2017 INTER ALIA UPHOLDING VALIDITY OF REOPENING BASED ON HONBLE AP EX COURTS DECISION HEREINABOVE. IT QUOTES HONBLE APEX COURTS YET A NOTHER JUDGMENT IN ITA NOS. 722 TO 725/AHD/16 (SHRI NARENDRASINH D. VA LA & SHRI DHARMENDRASINH G. GOHIL VS. ITO) - 4 - RAYMOND WOOLLEN MILLS LTD. VS. ITO (1999) 236 ITR 3 4 (SC) SETTLING THE LAW THAT A REOPENING CAN BE RESORTED TO ON THE BASI S OF A MERE PRIMA FACIE MATERIAL WHEREIN ITS CORRECTNESS AND SUFFICIENCY I S NOT TO BE CONSIDERED AT THRESHOLD STAGE. THERE IS NO DISTINCTION ON FACTS BEING POINTED OUT AT EITHER PARTYS BEHEST. WE THEREFORE UPHOLD THE REOPENING (S) UNDER CHALLENGE IN ALL FOUR CASES. 5. WE NOW ADVERT TO THE SECOND ISSUE OF ALLOW ABILI TY OF EXPENDITURE AGAINST INCENTIVE BONUS RECEIVED FROM THE LIFE INSU RANCE CORPORATION OF INDIA. LEARNED DEPARTMENTAL REPRESENTATIVE PLACES A VERY STRONG RELIANCE ON HONBLE APEX COURTS DECISION (SUPRA). WE HOWEVER NOTICE THAT THE ABOVE CO- ORDINATE BENCH HAS QUOTED HONBLE JURISDICTIONAL HI GH COURTS DECISION IN CIT VS. NITINBHAI T BHUPATANI TAX APPEAL NO. 1005/2005 DECIDED ON 08.02.2006 I.E. POST FACTO HONBLE APEX COURTS DECISION. IT HAS ACCORDINGLY ACCEPTED ASSESSEES CLAIM AFTER REFERRING TO HONBLE JURISDI CTIONAL HIGH COURTS LATTER JUDGMENT. THERE IS NO OTHER DISTINCTION ON FACTS C OMING FROM THE REVENUE SIDE APART FROM THE ABOVE LEGAL PLEA. WE THEREFORE FOLLOW CONSISTENCY IN VIEW OF LICS CLARIFICATION W.E.F. 01.04.1989 ENTIT LING ITS DEVELOPMENT OFFICERS FOR REIMBURSEMENT TO THE EXTENT OF 30%. W E ACCORDINGLY DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWAN CE IN ALL FOUR INSTANCES BEFORE US. ITA NOS. 722 TO 725/AHD/16 (SHRI NARENDRASINH D. VA LA & SHRI DHARMENDRASINH G. GOHIL VS. ITO) - 5 - 6. THIS LEAVES US WITH THE REMAINING ISSUE OF DISAL LOWANCE OF CONVEYANCE ALLOWANCE @50% IN LATTER ASSESSEES CASE (SUPRA). BOTH PARTIES ARE FAIR ENOUGH IN POINTING OUT THE FACT THAT THE ABOVE CO-O RDINATE BENCH HAS HELD THAT THE IMPUGNED IDENTICAL DISALLOWANCE @50% TO BE EXCE SSIVE FOR RESTRICTING THE SAME TO THAT @25% ONLY. WE ACCORDINGLY FOLLOW THE VERY COURSE OF ACTION HEREIN AS WELL. THE ASSESSING OFFICER SHALL DISALL OW 25% OF ASSESSEES CONVEYANCE ALLOWANCE TO THE TUNE OF RS.52,566/-; CO MING TO RS.13,140/- ONLY. THIRD ISSUE IS PARTLY ACCEPTED IN ASSESSEES FAVOUR. 7. THESE FOUR APPEALS ARE PARTLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 12 TH DAY OF SEPTEMBER, 2017.] SD/- SD/- ( MANISH BORAD ) ( S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 12/09/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0