PREM K SHROFF, MUMBAI V. ITO 19(1)(1), MUMBAI

ITA 772/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48754 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 02-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Salary income; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI J. SUDHAKAR REDDY J. SUDHAKAR REDDY J. SUDHAKAR REDDY J. SUDHAKAR REDDY (AM) AND (AM) AND (AM) AND (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) SMT. ASHA VIJAYARAGHAVAN (JM) SMT. ASHA VIJAYARAGHAVAN (JM) SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO. 772/MUM/2010 ASSESSMENT YEAR-2003-04 SHRI PREM K. SHROFF, M/S. J.J. MEHRA & CO., CHARTERED ACCOUNTANT, 11, LAXMI BLDG., 2 ND FLOOR, OFF TURNER ROAD, BANDRA (W),MUMBAI-400 050 PAN-AAVPS 1031L VS. THE ITO 19(1), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400 012 (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI S.S. RANA O R D E R O R D E R O R D E R O R D E R PER ASHA PER ASHA PER ASHA PER ASHA VIJAYARAGHAVAN (JM) VIJAYARAGHAVAN (JM) VIJAYARAGHAVAN (JM) VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 7.2.2008 PASSED BY THE LD. CIT(A)-XX FOR THE ASSESSMENT YEAR 2003-04. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE THEREFORE WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND DISPOSE OF THE MAT TER EX PARTE ON MERIT. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINESS AND ALSO HAS SALARY INCOME AS A DIREC TOR IN A PRIVATE LIMITED COMPANY. THE RETURN OF INCOME WAS F ILED ON 30.9.2003 DECLARING A TOTAL INCOME OF `. 2,10,605/-. THE NOT ICE U/S. 143(2) WERE ISSUED. THE ASSESSEE HAD INFORMED THE CHANGE OF ADDRESS TO ITO VIDE LETTER DT. 30.10.2004 FILED IN WARD 19(1). INSPITE OF HAVING DETAILED ADDRESS OF NEW RESIDENCE AND OFFICE ADDRESS ON THE RECO RDS . THE AO DID NOT SEND NOTICE IN TIME BEFORE PASSING THE EX-PAR TE ORDER.THE AO ITA NO. 772/M/2010 2 MADE ADDITIONS OF `. 3,81,175/- AS UNDISCLOSED INCOME A ND COMPUTED THE TOTAL INCOME AT `. 592320. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE L D. CIT(A) ON 16.2.2006. THE CIT HAS DIRECTED THE ASSESSEE TO SUBMIT TH E RECONCILIATIONS REGARDING THE ADDITIONS MADE TO THE A O AS FOLLOWS:. IN COURSE OF THE ASSESSMENT PROCEEDINGS, FROM THE TDS CERTIFICATES ATTACHED TO THE RETURN IT WAS FOUND THAT THE APPELLANT HAD NOT DISCLOSED INCOME TO THE TUNE OF `. 3,81,715/-. THIS WAS FOUND FROM FORM NO. 16A ATTACHE D TO THE RETURN. THE SUM WAS ADDED UNDER THE HEAD INCOME FROM OTHER SOURCES AS UNDISCLOSED SOURCES. IN APPEAL, IT WAS SUBMITTED THAT THIS INCOME HAD ALREADY BEEN ACCOUNTED FOR . A RECONCILIATION WAS ALSO SUBMITTED. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. AS I FIND, THE APPELLANT HAS SUBMITTED A RECONCILIATION. HE IS DIRECTED TO SUBMIT THIS TO THE AO AND THE AO IS DIRECTED TO VERIFY THE RECONCIL IATION AND ALLOW THE APPELLANTS CLAIM IN CASE ON VERIFICATI ON HE IS SATISFIED THAT THE INCOME IN QUESTION STANDS ALREADY DISCLOSED. THESE GROUNDS OF APPEAL ARE TREATED AS ALLOW ED. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 5. THE ITO HAS ON 24.4.2008 IN THE ORDER GIVING EFF ECT TO THE ORDER OF CIT(A) HAS ALLOWED `. 2,72,829/- AND UPHELD THE B ALANCE ADDITIONS OF `. 1,08,346/- AS FOLLOWS: A) TOTAL INCOME RETURNED BY THE ASSESSEE `.2,10,605/- B) TOTAL ADDITIONS AS FOLLOWS: COMMISSION INCOME `. 38,346/- INTEREST FROM M/S. PEE GEE & SONS `. 60,000/- RECEIVED FROM UTI `. 10,000/- `.1,08,346/- REVISED TOTAL INCOME `.3,18,951/- 6. ASSESSEE HAS PREFERRED AN APPEAL ON 1.12.2008 AGAINST THE ABOVE ADDITIONS BEFORE THE LD. CIT(A). THE LD. CIT (A) UPHELD THE ADDITIONS MADE BY THE AO. ITA NO. 772/M/2010 3 7. AGGRIEVED WITH THE PARTIAL RELIEF AND THE ADDITI ONS, THE ASSESSEE PREFERRED AN APPEAL BEFORE US. 8. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS SUBMITTED AS FOLLOWS: YOUR APPELLANT HAS SHOWN AN AMOUNT OF `. 38,346/- TO WARDS COMMISSION RECEIVED FROM M/S. CHEPAR PLASTICS PVT. LTD. IN THE ACCOUNTING YEAR 2001-02, THE TAX DEDUCTION CERTIFIC ATE FOR THE SAME WERE ISSUED IN THE ACCOUNTING YEAR 2002-03, AND HENCE THE TDS WAS CLAIMED IN THE YEAR 2002-03 WHEREAS THE INCOME (I.E . COMMISSION) WAS SHOWN IN THE ACCOUNTING YEAR 2001-02 HENCE THE AM OUNT SHOULD NOT BE ADDED BE INCOME THE ASSESSEE HAS ONLY CLAIMED TAX DEDUCTION. AS PER THE EXPLANATION GIVEN ABOVE THERE SHOULD BE AN Y ADDITION TO THE INCOME AND SUBSEQUENTLY NO PENALTY IS APPLICABLE. YOUR APPELLANT HAS SHOWN INTEREST RECEIVED FROM M/S. PE E GEE & SONS AMOUNTING TO `. 60,000/- BY WAY OF QUARTERLY IN TEREST RECEIVED BY ENTRIES OF `. 15,000/- PER QUARTERLY AS FOLLOWS: DATE AMOUNT 8.4.2002 15,000/- 1.7.02 15,000/- 7.10.02 15,000/- 8.1.03 15,000/- ---------- TOTAL `60,000/- M/S. PEE GEE & SONS HAS DEDUCTED TDS ONLY AGAINST THE FINAL QUARTERLY INTEREST PAID ON 08 TH JAN. 2003 AND SUBSEQUENTLY ISSUED TDS CERTIFICATE FOR THE SAME, THERE IS NO CONCEALMENT OF INCOME AND ALSO THE AMOUNT OF `. 60,000/- SHOULD NOT BE ADDED TO THE INCOME, AS THE AMOUNT IS ALREADY SHOWN IN THE INCOME AND EXPENDITUR E ACCOUNT, FOR THE YEAR 2002-03. YOUR APPELLANT HAD PURCHASED UTI-MASTER EQUITY PLAN-9 2. UNITS AMOUNTING TO `. 10,000/- IN THE ACCOUNTING YEAR 199 1-92 TO AVAIL OF TAX EXEMPTION, THE SCHEME HAD A TENURE OF 10 YEARS AND W AS DUE FOR REDEMPTION IN THE ACCOUNTING YEAR 2002-03, THE TOTA L AMOUNT DUE ON REDEMPTION WAS `. 14,870/- AND ON REDEMPTION UTI HAD DEDUCTED A SUM OF `. 2040/- @ 20.40% ON THE PRINCIPLE AMOUNT OF `. 10,000/- AND ISSUED A CHEQUE OF `. 12830/- (I.E. TOTAL AMOUNT OF ` . 14,870/-). APPELLANT HAS SHOWN AN INCOME UNDER THE HEAD LONG T ERM CAPITAL GAINS OF `. 4870/- THUS THE INCOME WAS SHOWN, HENCE T HE SAME SHOULD NOT CLUBBED AGAINST. APPELLANT REQUESTS TO DELETE TH E ADDITIONS MADE. ITA NO. 772/M/2010 4 THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT VE RIFICATION IS REQUIRED ON THE UNVERIFIED AMOUNTS APPEARING ON THE TDS CERTIFICATES WITH RESPECT TO (I) COMMISSION (II) INTEREST FROM M/S. P EE GEE & SONS AND (III) AMOUNT RECEIVED FROM UTI. IN THESE CIRCUMSTANCES WE DEEM IT FIT TO RESTORE THE I SSUE TO THE FILE OF THE AO TO VERIFY THE AMOUNTS APPEARING ON TH E TDS CERTIFICATES. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF MAY, 2011 (J. SUDHAKAR REDDY) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED .. MAY, 2011 RJ ORDER PRONOUNCED ON THIS 6 TH DAY OF MAY, 2011 SD/- SD/- (JT.R. SOOD) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 6 TH MAY, 2011 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR C BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 772/M/2010 5 DATE INITIALS 1 DRAFT DICTATED ON: 4 .0 5 .2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 4 .0 5 .2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10. DATE OF DISPATCH OF ORDER: _________ ______