Sundeep Sethia, Kolkata V. DCIT, CIR-26, KOLKATA, Kolkata

ITA 942/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9376 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-05-2016
• Court: TRIBUNAL
• Department Lawyers: S M S T AUHEED
• Assessee Lawyers: ARVIND AGARWAL
• Section: 143(3); 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ./ ITA NO.942/KOL/2016 ( / ASSESSMENT YEAR:2010-11) SUNDEEP SETHIA, 38, BARANASHI GHOSH STREET, KOLKATA-700007 VS. DCIT, CIRCLE-26, 169 AJC BOSE ROAD, BAMBOO VILLA KOLKATA-14 ./ ./PAN/GIR NO.: AOWPS 1991 Q ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI ARVIND AGARWAL, ADVOCATE REVENUE BY : SHRI S.M.S. TAUHEED, JCIT / DATE OF HEARING : 29/12/2016 /DATE OF PRONOUNCEMENT 22/02/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINI NG TO THE ASSESSMENT YEAR 2010-11, IS DIRECTED AGAINST THE OR DER PASSED BY LD. CIT(A)-19, KOLKATA IN APPEAL NO.73/CIT(A)-19/KOL/20 14-15, DATED 15.02.2016, WHICH IN TURN ARISES OUT OF AN ORDER PA SSED BY THE ASSESSING OFFICER (AO) UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 01.03 .2013. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED ITS RETURN OF INCOME ON 01.02.2011 DECLARING TOTAL INCOME OF RS.10,88,600/- AND THE SAME WAS PROCESSED U/S.143(1 ) OF THE ACT ON 07.05.2011. LATER ON ASSESSEES CASE WAS SELECTED F OR SCRUTINY U/S.143(3) OF THE ACT AND THE AO HAS COMPLETED THE ASSESSMENT BY MAKING THE DISALLOWANCE OF RS.7,27,865/- ON ACCOUNT OF ADVANCE SALARY RECEIVED. ITA NO.942/16 SUNDEEP SETHIA 2 3. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ORDER PASSED BY THE AO OBSERVING THE FOLLOWINGS :- 5. I HAVE CONSIDERED THE FACTS OF THE CASE. THE ASS ESSING OFFICER HAD ADDED THE SUM OF RS. 7,27,865/- UNDER SECTION 17(1) (V) OF THE I.T. ACT, 1961 AS SALARY ADVANCE TO THE INCOME OF THE ASSESSE E. THE ASSESSEE HAD CLAIMED IT TO BE ADVANCE/LOAN TAKEN FROM THE CO MPANY WHERE HE WORKED BUT THE SAME WAS NOT ACCEPTED BY THE ASSESSI NG OFFICER AS THE SAID AMOUNT WAS NOT REFLECTED AS A LOAN IN THE AUDI TABLE BALANCE SHEET OF THE COMPANY. I FIND THAT THE AMOUNT THAT THE AMOUNT CLAIMED TO HAVE BEEN RETURNED BY THE ASSESSEE TO THE COMPANY DOES NOT TA LLY WITH THE AMOUNT THAT WAS ADDED AS THE SALARY ADVANCE AND NO WORKING /RECONCILIATION IS PRODUCED IN THIS REGARD. FURTHER, THE ASSESSING OFF ICER'S FINDING THAT THE AMOUNT IS NOT REFLECTED IN THE AUDITED ACCOUNTS OF THE COMPANY HAS NOT BEEN REBUTTED BY THE APPELLANT IN ANY WAY. UNDER TH E CIRCUMSTANCES, I AM UNABLE TO ALLOW THE APPELLANT THE RELIEF PRAYED FOR . THE ADDITION OF RS. 7,27,865/- IS CONFIRMED. 5. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE ADDITION MADE BY LEARNED ASSESSING OFFICER OF RS.7 ,27,865/- BEING REFUNDABLE ADVANCE RECEIVED FROM THE EMPLOYER WHICH WAS ALSO REPAID. 6. LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT ASSESSEE HAS RECEIVED PERQUISITE FROM THE COMPANY WHICH IS EXEMP TED UNDER SECTION 17 (2) (III) (A), THAT IS BENEFIT AND AMENITY GRANT ED OR PROVIDED FREE OF COST, THEREFORE IT IS NOT TAXABLE AT ALL IN THE HANDS OF THE ASSESSEE. THE LD AR FURTHER DREW OUR ATTENTION TOWARDS THE PROVISIONS O F SECTION 17 (2) (III) (A) WHICH READS AS UNDER: SECTION 17: SALARY, PERQUISITE AND PROFITS IN LIEU OF SALA RY DEFINED. FOR THE PURPOSES OF SECTION S 15 AND 16 AN D OF THIS SECTION, (2) PERQUISITE INCLUDES.. (III) THE VALUE OF ANY BENEFIT OR AMENITY GRANTED OR PROVIDED FREE OF COST OR AT CONCESSIONAL RATE IN ANY OF THE FOLLOWING CASES ITA NO.942/16 SUNDEEP SETHIA 3 (A) BY A COMPANY TO AN EMPLOYEE WHO IS A DIRECTOR T HEREOF; THE LD AR FOR THE ASSESSEE ALSO DREW OUR ATTENTION TOWARDS RULE 3 (7) (I) OF THE INCOME TAX RULES, 1962 WHICH READS AS UNDER: RULE 3 : VALUATION OF PERQUISITES (7) IN TERMS OF PROVISIONS CONTAINED IN SUB-CLAUSE (VIII) OF CLAUSE (2) OF SECTION 17, THE FOLLOWING OTHER BENEFITS OR AMENITIES AND VALUE THEREOF SHALL BE DETERMINED IN THE MANNER PRO VIDED HEREUNDER : (I) THE VALUE OF THE BENEFIT TO THE ASSESSEE RESULT ING FROM THE PROVISION OF INTEREST-FREE OR CONCESSIONAL LOAN FOR ANY PURPOSE MADE AVAILABLE TO THE EMPLOYEE OR ANY MEMBER OF HIS HOUSEHOLD DURING THE RELEVANT PREVIOUS YEAR BY THE EMPLOYER O R ANY PERSON ON HIS BEHALF SHALL BE DETERMINED AS THE SUM EQUAL TO THE INTEREST COMPUTED AT THE RATE CHARGED PER ANNUM BY THE STATE BANK OF INDIA, CONSTITUTED UNDER THE STATE BANK OF INDIA ACT, 1955 (23 OF 1955), AS ON THE 1ST DAY OF THE RELEVAN T PREVIOUS YEAR IN RESPECT OF LOANS FOR THE SAME PURPOSE ADVAN CED BY IT ON THE MAXIMUM OUTSTANDING MONTHLY BALANCE AS REDUCED BY THE INTEREST, IF ANY, ACTUALLY PAID BY HIM OR ANY SUCH MEMBER OF HIS HOUSEHOLD. THEREFORE, LD AR SUBMITTED THAT CONSIDERING THE PRO VISIONS OF SECTION 17(2) (III) (A) AND RULE 3(7) (I) OF THE I. T. RULES, CITED ABOVE, IT IS A BENEFIT AND AMENITY GRANTED TO THE A SSESSEE BY HIS EMPLOYER COMPANY AND HENCE NOT TAXABLE IN THE HANDS OF THE ASSESSEE. 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS P RIMARILY RELIED ON THE FINDINGS OF THE AO WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 8. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. AS LD. AR FOR THE ASSESSEE HAS POINTED OUT THAT PAYMENT RECEIVED BY THE ASSESSEE IS A BENE FIT AND AMENITY PROVIDED TO HIM BY HIS EMPLOYER COMPANY THEREFORE I T IS NOT TAXABLE IN THE HANDS OF THE ASSESSEE. PAYMENT RECEIVED BY THE ASSE SSEE IS FULLY COVERED BY THE PROVISIONS OF SECTION 17 2 (III) (A) OF THE I.T. ACT AND RULE 3 (7) (I) OF THE I.T. RULES, WHICH IS BENEFIT OR AMEN ITY PROVIDED TO THE ASSESSEE AT FREE COST, BY HIS EMPLOYER COMPANY. CON SIDERING THE FACTUAL ITA NO.942/16 SUNDEEP SETHIA 4 POSITION, WE ARE OF THE VIEW THAT ADDITION MADE BY LEARNED ASSESSING OFFICER OF RS.7,27,865/- AND CONFIRMED BY THE LD CIT(A) NEE DS TO BE DELETED. ACCORDINGLY, WE DELETE THE ADDITION. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE, IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/0 2/2017. S D/ - (A.T.VARKEY) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 22/02/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-SUNDEEP SETHIA 2. / THE RESPONDENT.- DCIT, CIRCLE-26, KOLKATA-14 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//