Shri Ketan Mehta,Bhopal, Indore V. The DCIT, Bhopal

ITSSA 102/IND/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8636 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-12-2010
• Assessment Year: misc
• Appeal Filed On: 13-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA SENIOR
• Assessee Lawyers: M C MEHTA; HITESH CHIMNANI CAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C.SHARMA, ACCOUNTANT MEMBER PAN NO. : ABTPM8313Q I.T(SS)A.NO.102/IND/2009 BLOCK PERIOD 1.4.1989 TO 21.7.1999 SHRI KETAN MEHTA, DY. CIT, H-18, NISHAT COLONY, VS 2(1), BHOPAL BHOPAL (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M. C. MEHTA AND SHRI HITESH CHIMNANI, CAS RESPONDENT BY : SHRI P.K.MITRA, SENIOR D.R. O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 21/08/2009 IN THE MATTER OF IMPOSIT ION OF PENALTY U/S 158BFA(2) OF THE INCOME-TAX ACT, 1961. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 3. WHILE FRAMING ASSESSMENT U/S 158BC, THE AO DISALLOWED ASSESSEES CLAIM OF DEDUCTION ON ACCOUNT OF BANK -: 2: - 2 INTEREST. ACCORDINGLY, THE ADDITION WAS MADE AND SU BSEQUENTLY PENALTY WAS IMPOSED U/S 158BFA(2) IN RESPECT OF SUC H INTEREST INCOME FROM BANK, WHICH WAS NOT ALLOWED AS A DEDUCT ION, WHILE COMPUTING THE INCOME OF THE BLOCK PERIOD. 4. FROM THE RECORD, WE FOUND THAT THE ADDITION WAS MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INTEREST INCOME EARNED ON FOUR FDRS AMOUNTING TO RS. 1,23,32 2/-. HOWEVER, WHILE COMPUTING THE TOTAL UNDISCLOSED INCO ME, THE AO DID NOT BIFURCATE THE INTEREST TO THE RESPECTIVE YEARS TO WHICH IT PERTAINED AND, ACCORDINGLY, DID NOT ALLOW THE DEDUCTION U/S 80L IN RESPECT OF SUCH INTEREST INCOM E. BEFORE THE LOWER AUTHORITIES, THE ASSESSEE HAS FURNISHED C ORRECT YEAR- WISE BREAK UP OF INTEREST ON THESE FOUR FDRS. HOWEV ER, THE AO MADE ADDITION ON ACCOUNT OF SUCH ACCRUAL OF INTERES T, WHICH WAS PARTLY DELETED BY THE LD. CIT(A) TO THE EXTENT OF RS. 99,317/- AND THE MATTER WAS RESTORED BACK TO THE FI LE OF AO TO COMPUTE CORRECT INTEREST, ASSESSABLE YEAR-WISE AND ALSO TO ALLOW DEDUCTION DEDUCTION U/S 80L. WHILE PASSING AP PEAL EFFECT ORDER DATED 23.9.2004, THE AO ALLOWED DEDUCT ION U/S 80L AT RS. 80,503/-, HOWEVER, WITH RESPECT OF THE R EMAINING -: 3: - 3 BALANCE OF RS. 42,817/-, HE SUSTAINED THE ADDITION. PENALTY WAS LEVIED WITH RESPECT TO INCOME OF RS. 42,817/-. AS PER THE CHART PLACED ON RECORD, DEDUCTION U/S 80L, WORKS OU T TO THE EXTENT THAT TOTAL INCOME REMAINS BELOW TAXABLE LIMI T. AS PER OUR CONSIDERED VIEW WHILE COMPUTING INCOME FOR THE BLOCK PERIOD, DEDUCTION U/S 80L IN RESPECT OF INTEREST ON FDR IS TO BE ALLOWED. IN THE INTEREST OF JUSTICE, WE RESTORE THE MATTER BACK TO THE FILE OF AO TO RE-VERIFY THE INTEREST AC CRUED ON FDR IN THE RESPECTIVE YEARS AND TO ALLOW DEDUCTION U/S 80L IN RESPECT OF EACH OF THE YEARS FALLING WITHIN THE BLO CK PERIOD. ONCE THE INCOME OF EACH YEAR REMAINS BELOW TAXABLE LIMIT AFTER ALLOWING CLAIM OF DEDUCTION U/S 80L, NO PENALTY IS IMPOSABLE U/S 158BFA(2). WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS ALLOWED IN TERMS INDIC ATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2011. SD/- SD/ (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST JANUARY, 2011. -: 4: - 4 CPU* 311