The Income Tax Officer, Jalandhar V. Rajesh Joshi, Prop. M/s. Yash Enterprises, Jalandhar

ITA 80/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0573 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 03-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: DINESH SARNA
• Keywords: Salary income; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.80(ASR)/2016 ASSESSMENT YEAR:2011-12 PAN:AGIPJ8312L INCOME TAX OFFICER, VS. SH. RAJESH JOSHI, PROP. WARD IV(1), JALANDHAR. M/S. YASH ENTERPRISES, JANDU SINGHA, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. BHAWANI SHANKER, DR RESPONDENT BY: SH. DINESH SARNA, ADV. DATE OF HEARING: 29/06/2016 DATE OF PRONOUNCEMENT: 11/07/2016 ORDER PER A.D. JAIN, JM: THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2011-12, AGAINST THE ORDER DATED 19.11.2015, PASSED BY THE LD. CIT(A)-2, JALANDHAR. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DIRECTING THE AO TO ALLOW CREDIT FOR PAYMENT OF TAXES ON INCOME FROM SALARY TO THE E XTENT PAID BY THE ASSESSEE IN THE SOURCE COUNTRY AS PER P ROVISIONS OF SECTION 91 OF THE INCOME TAX ACT, 1961 ONLY BY R ELYING ON SOME UNAUTHENTIC EVIDENCES SUBMITTED BY THE ASSESS EE DURING THE APPELLATE PROCEEDINGS. 2. THAT IT IS PRAYED THAT THE ORDER OF THE LD. CIT( A) BE SET ASIDE AND THAT OF THE AO RESTORED. ITA NO. 80(ASR)/2016 A.Y. 2011-12 2 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS A STOCKIEST OF DABUR PRODUCTS AND ALSO EARNED SALARY INCOME FROM O THER SOURCES, FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON, DECLARING THEREIN AN INCOME OF RS.7,69,910/- . HOWEVER, THE AO COMPLE TED THE ASSESSMENT AT AN ASSESSED INCOME OF RS.72,81,160/-. WHILE COMP LETING ASSESSMENT, THE AO MADE AN ADDITION OF RS.65,11,553/- TO THE RE TURNED INCOME OF THE ASSESSEE WHICH HAD BEEN EARNED FROM A FOREIGN COMP ANY IN FOREIGN CURRENCY, CLAIMED AS EXEMPT WHILE FILING THE RETUR N OF INCOME ON THE GROUND THAT THE SALARY INCOME HAD ALREADY SUFFERED TAX IN THE FOREIGN COUNTRY. 3. THE LD. CIT(A), BY VIRTUE OF THE IMPUGNED ORDER, DIRECTED THE AO TO ALLOW CREDIT TO THE ASSESSEE FOR PAYMENT OF TAXES ON INCOME FROM SALARY TO THE EXTENT PAID BY THE ASSESSEE IN THE SOURCE CO UNTRY, I.E., AS PER THE PROVISIONS OF SECTION 91 OF THE ACT. 4. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, RELIED ON THE IMPUGNED ORDER. 6. THE LD. CIT(A) HAS OBSERVED AS UNDER: 6.4. I HAVE CONSIDERED THE OBSERVATIONS OF THE AO AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND RE PORT. I HAVE ALSO CONSIDERED WRITTEN SUBMISSIONS FILED BY THE ASSESSE E VIDE LETTER DATED 23.10.2015 AS WELL AS HIS COUNTER COMMENTS ON THE REPORT OF THE A.O. I HAVE FURTHER CONSIDERED OTHER MATERIAL P LACED BY THE ASSESSEE ON RECORD. ON CAREFULLY CONSIDERATION OF T HE RIVAL CONTENTIONS AND MORE PARTICULARLY LOOKING INTO THE RELEVANT PROVISIONS OF THE ACT, I AM ALSO OF THE OPINION THA T THE ASSESSEE HAS RIGHTLY BEEN TREATED AS RESIDENT FOR THE PURPOSES O F TAXATION. I AM ALSO OF THE OPINION THAT SALARY INCOME HAS ALSO BEE N RIGHTLY TAXED IN ITA NO. 80(ASR)/2016 A.Y. 2011-12 3 HIS HANDS AS THE ASSESSEE IS RESIDENT FOR OTHER SOU RCES OF INCOME DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME. H OWEVER, IT HAS ALSO BEEN SEEN THAT THE ASSESSEE HAS ALREADY PAID T AXES ON HIS SALARY INCOME IN THE SOURCE COUNTRY AND HE HAS ALSO PLACED ON RECORD NECESSARY EVIDENCE IN THIS REGARD. IT HAS FU RTHER BEEN SEEN THAT THE AO HAS NOT COMMENTED ANYTHING ON THE EVID ENCE PRODUCED BY THE ASSESSEE WITH REGARD TO PAYMENT OF TAXES IN SOURCE COUNTRY. IN MY OPINION, THE ASSESSEE HAD PRODUCED RELEVANT DOCUMENTS AND EVEN CERTIFICATE FROM REVENUE AUTHORITIES OF THE SO URCE COUNTRY WITH REGARD TO PAYMENT OF TAX IN SOURCE COUNTRY. IN MY F URTHER OPINION, THE EVIDENCE PRODUCED BY THE ASSESSEE WITH REGARD T O PAYMENT OF TAX IN SOURCE COUNTRY SHOULD BE ACCEPTED AS EVIDENC E IN RESPECT OF PAYMENT OF TAXES IN THE SOURCE COUNTRY. I AM, THERE FORE, OF THE CONSIDERED OPINION THAT THE ASSESSEE SHOULD BE ALLO WED THE BENEFIT OF TAXES TO THE EXTENT PAID BY HIM IN THE SOURCE CO UNTRY OUT OF THE TAX DETERMINED BY THE AO AS THE ASSESSEE HAS ALREAD Y PAID THE TAXES ON HIS SALARY INCOME IN THE SOURCE COUNTRY. T HE PROVISIONS OF SECTION 91 OF THE ACT SPECIFICALLY EMPOWER THE AO TO ALLOW SUCH RELIEF. THE AIO IS, THEREFORE, DIRECTED ACCORDINGLY . 6.5. IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE OF THE ASSESSEE, THE ACTION OF THE AO IN T AXING THE SALARY INCOME EARNED BY THE ASSESSEE IN FOREIGN COUNTRY IN THE HANDS OF THE ASSESSEE IS UPHELD WITH A DIRECTION TO ALLOW CREDIT FOR PAYMENT OF TAXES TO THE EXTENT PAID BY THE ASSESSEE IN THE SOU RCE COUNTRY AS PER PROVISIONS OF SECTION 91 OF THE ACT. IN THE RESULT, GROUND NO. 2 OF APPEAL TAKEN BY THE ASSESSEE IS DISPOSED OF IN THIS MANNER. 7. A READING OF THE IMPUGNED ORDER SHOWS THAT THE LD. CIT(A) ASKED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. THI S REMAND REPORT DATED 10.11.2015 STANDS REPRODUCED AT PAGES 12 OF THE IMP UGNED ORDER. IN THE REMAND REPORT, NO COMMENTS WERE OFFERED BY THE AO R EGARDING THE EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE LD. CI T(A). THE LD. CIT(A) GRANTED THE RELIEF TO THE ASSESSEE ON HAVING EXAMIN ED THE RELEVANT DOCUMENTS PRODUCED BY THE ASSESSEE, INCLUDING THE C ERTIFICATE OF THE REVENUE AUTHORITY, CERTIFYING THAT THE TAXES HAD BE EN PAID BY THE ASSESSEE. THE DEPARTMENT CANNOT NOW MAKE AN EXCUSE TO CONTEND THAT ITA NO. 80(ASR)/2016 A.Y. 2011-12 4 THE DOCUMENTS SUBMITTED BY THE ASSESSEE WERE UNAUTH ENTIC. THIS ALLEGATION IS A WILD ALLEGATION, WITHOUT ANY BASIS. THE ORDER OF THE LD. CIT(A) IS WELL REASONED AND CANNOT BE FOUND FAULT W ITH. THE LD. CIT(A) HAS RIGHTLY UPHELD THE AOS ACTION OF TAKING THE SALA RY INCOME EARNED BY THE ASSESSEE IN THE FOREIGN COUNTRY IN THE HANDS OF THE ASSESSEE. THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO ALLOW CREDIT FOR PAYMENT OF TAXES TO THE EXTENT PAID BY THE ASSESSEE IN THE SOURCE COUNT RY, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 91 OF THE INCOME TAX ACT, 1961. IT REMAINS UNDISPUTED THAT AS FOUND BY THE LD. CIT(A), FOR THE PURPOSES OF TAXATION, THE ASSESSEE HAS BEEN TREATED AS A RESIDENT FOR HIS SOURCES OF INCOME AND HE PAID DUE TAXES ON HIS SALARY INCOME, AS CERTIFIE D BY THE SOURCE COUNTRY. 8. THE GRIEVANCE OF THE DEPARTMENT IN THIS REGARD I S, THUS, FOUND TO BE UNJUSTIFIED AND IS REJECTED AS SUCH. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/07/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 11/07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.RAJESH JOSHI, JALANDHAR. 2. THE ITO WARD-IV(1), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER