ITO, Pudukkottai V. S.P.Natarajan, Pudukkottai

ITA 767/CHNY/2015

• Counselvise Citation: 76721714 RSA 2015
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 17-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-04-2015
• Court: TRIBUNAL
• Department Lawyers: B NISCHAL
• Keywords: Business income; Difference of opinion; Change of opinion
• Section: 143(3); 147

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHENNAI . . . , . , , ! BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ' ./ I.T.A.NO.767 /MDS./2015 ( #$ %$ / ASSESSMENT YEAR :2006-07) THE INCOME TAX OFFICER, WARD NO.1, PUDUKKOTTAI. VS. SHRI S.P.NATARAJAN, T.S.NO.5400, MARTHANDAPURAM, II STREET, PUDUKKOTTAI 622 001. PAN AJUPS 2204 D ( / APPELLANT ) ( / RESPONDENT ) '&' ( ) / APPELLANT BY : MR.B.NISCHAL, JCIT D.R *+&' ( ) / RESPONDENT BY : MR.PHILIP GEORGE, ADVOCATE , - ( . / / DATE OF HEARING : 17.07.2015 0% ( . / /DATE OF PRONOUNCEMENT : 26.08.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-2, TIRUCH IRAPALLI DATED ITA NO.767/MDS/2015 2 17.12.2014 IN ITA NO.136/2011-12/CIT(A)/TRY PASSED UNDER SEC.143(3) READ WITH SECTION 147 & SEC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED FOUR ELABORATE GROUNDS I N ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE I S AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD DIRECTED THE LD. ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION ON ACCOUNT OF INTER EST PAID AMOUNTING TO ` 54,900/- WHILE COMPUTING THE BUSINESS INCOME OF THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF MONEY LENDING, FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 04.08.2006 ADMIT TING HIS INCOME AS ` 5,34,389/-. INITIALLY THE RETURN WAS PROCESSED U/S .143(1) OF THE ACT ON 25.07.2007. SUBSEQUENTLY, THE CASE WAS SELEC TED FOR SCRUTINY AND THE ASSESSEE U/S.143(3) WAS COMPLETED ON 31.12. 2008 WHEREIN THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT ` 63,06,906/-. THEREAFTER, WHILE GIVING EFFECT TO THE ORDER OF THE LD. CIT (A),TRICHY, THE INCOME WAS REVISED TO ` 5,81,390/- VIDE ORDER DT 07.10.2010. SUBSEQUENTLY, ONCE AGAIN THE CASE WAS REOPENED U/S. 147 BY ITA NO.767/MDS/2015 3 ISSUANCE OF NOTICE U/S.148 ON 30.3.2011. IN THAT P ROCEEDINGS, THE LD. ASSESSING OFFICER DISALLOWED ` 54,900/- BEING THE AMOUNT CLAIMED BY THE ASSESSEE AS INTEREST PAYMENT BECAUSE ON THE EAR LIER OCCASION THE INCOME WAS ESTIMATED AND THEREFORE, THE AFORESA ID EXPENSES HAD TO BE TREATED AS DEEMED TO HAVE BEEN ALLOWED AT THA T TIME. 4. ON APPEAL, THE LD. CIT (A) DELETED THE ADDITION OF ` 54,900/- BY OBSERVING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE ORDER OF THE ASSES SING OFFICER AND ALSO THE ARGUMENTS ADVANCED BY THE AUTHORIZED REPRESENTATIVE . IT IS A FACT THAT THE CLAIM OF INTEREST AS WELL AS THE ADMISSION OF INCOM E FROM BUSINESS ON ESTIMATE BASIS, AS EVIDENCED FROM THE RETURN OF INC OME FILED AS WELL AS THE ORDER U/S. 143(3) PASSED BY THE ASSESSING OFFICER. IT IS ALSO SEEN THAT NO NEW MATERIAL HAS SURFACED SUBSEQUENT TO THE ORDER U /S 143(3). THE PRESENT ORDER OF THE ASSESSING OFFICER IS NOTHING BUT THE C HANGE OF OPINION. BESIDES, AS HELD IN THE CASES CITED SUPRA, THERE IS NO PROVI SION UNDER THE CHAPTER OF COMPUTATION OF BUSINESS INCOME FOR DISALLOWANCE OF ANY EXPENDITURE, APART FROM WHAT IS LAID DOWN U/S 43 B AND SECTION 40. RES PECTFULLY THE FOLLOWING JUDGEMENT CITED SUPRA, I AM CONSTRAINED TO DELETE T HE ADDITION OF RS. 54900 MADE BY THE ASSESSING OFFICER AND THE APPEAL IS ALL OWED. 5. BEFORE ME, THE LD. D.R ARGUED BY STATING THAT THE AMOUNT OF INTEREST PAYMENT OF ` 54,900/- CANNOT BE ALLOWED AS DEDUCTION ONCE AGAIN BECAUSE CONSIDERING THESE EXPENDITURES ON THE EARLIER ITA NO.767/MDS/2015 4 OCCASION THE INCOME OF THE ASSESSEE WAS ESTIMATED. IT WAS THEREFORE PLEADED THAT THE ORDER OF THE LD. ASSESSING OFFICER MAY BE CONFIRMED. THE LD. A.R. ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDER OF THE LD. CIT (A). 6. AFTER HEARING BOTH THE PARTIES, I FIND MERIT IN THE CONTENTION OF THE LD. D.R. ON THE EARLIER OCCASION THE INCOME OF THE ASSESSEE WAS ASSESSED ON ESTIMATE BASIS KEEPING IN MIND OF ALL T HE EXPENSES INCURRED BY THE ASSESSEE FOR EARNING INCOME. IN THE SE CIRCUMSTANCES, A SEPARATE DEDUCTION OF EXPENSES CANNOT BE CONSIDER ED IN ISOLATION AND ALLOWED AS DEDUCTION. FROM THE ORDER OF THE LD . ASSESSING OFFICER, IT IS EVIDENT THAT THE ASSESSMENT WAS REOP ENED ONLY TO RECTIFY THIS MISTAKE THAT HAD OCCURED ON THE EARLIER OCCASI ON. THEREFORE, FROM THE FACTS OF THE CASE IT CANNOT BE SAID THAT I T IS A CHANGE OF OPINION BASED ON WHICH THE ASSESSMENT WAS REOPENED AND ADDITIONS WERE MADE. THEREFORE, I HEREBY SET ASIDE THE ORDER OF THE LD. CIT (A) AND CONFIRM THE ORDER OF THE LD. ASSESSING OFFICER. ITA NO.767/MDS/2015 5 7. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED. ORDER PRONOUNCED ON 26 TH AUGUST, 2015 AT CHENNAI. SD/- ( . ! ' ) (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER CHENNAI, DATED THE 26 TH AUGUST, 2015. K S SUNDARAM. ( *.12' 32%. /COPY TO: 1. '&' /APPELLANT 2. *+&' /RESPONDENT 3. , 4. (') /CIT(A) 4. , 4. /CIT 5. 27 *.8# /DR 6. 9$ :- /GF