SHRI. RAVINDRA R V,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-5(3)(2), BENGALURU

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

Ravindra R.V., Bangalore Page 2 of 4 3.1 The assessee has claimed exemption u/s 10(13A) of the Income-tax Act,1961 ['the Act' for short] towards the house rent allowance which is part of his salary component amounting to Rs.1,02,564/-. While processing the return of income, the exemption claimed has been denied on the basis that amount claimed to have been the least of an amount equal to 50% of the Basic + DA or excess rent paid either 10% of salary or actual HRA received. However, the ld. AO denied the benefit u/s 10(13A) of the Act on the reason that the return of income did not have specific details of breakup of Basic salary, DA, HRA, etc. and also return of income did not have specific window or caption, which could capture the data of HRA exemption. In the absence of suitable details while processing return u/s 143(1)(a) of the Act, the benefit of HRA not given. On appeal, ld. CIT(A) confirmed the same. Against this assessee is in appeal before us.

Ravindra R.V., Bangalore Page 3 of 4 4.1 According to him, the assessee is entitled for HRA exemption to the tune of Rs.1,02,564/- out of HRA received to the tune of Rs.1,79,440/- and computed the deduction u/s 10(13A) of the Act read with Rule 2A of the Income Tax Rules, 1962 as follows:

4.2 In our opinion, these details are not available in the return of income filed by the assessee along with Form No.16. As such, ld. NFAC/CIT(A) adopted the entire salary instead of considering the Basic & DA while computing the benefit u/s 10(13A) of the Act read with Rule 2A of the I.T. Rules. In our opinion, it is appropriate to remit this issue to the file of ld. AO to re-examine the issue for the purpose of quantification of HRA on the basis of Form No.16 filed by the assessee before lower authorities. Accordingly, the issue in dispute is remitted to the file of ld. AO for reconsideration so as to grant deduction towards HRA.