Loading judgment…
Facts
The assessee, a professor at IIT Roorkee, claimed expenditure against consultancy income. The AO disallowed this claim, treating the consultancy income as part of salary, and the CIT(A) upheld the disallowance.
Held
The Tribunal, relying on a coordinate bench's decision which followed earlier precedents, held that the expenditure claim against consultancy income, declared as income from other sources, should be allowed. The revenue could not provide any distinguishing features or higher judicial pronouncements to counter this.
Key Issues
Admissibility of expenditure claimed against consultancy income which was treated as salary by the lower authorities.
Sections Cited
143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DEHRADUN “SMC” BENCH, DEHRADUN
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
This assessee’s appeal for assessment year 2013-14, arises against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], Haldwani’s order dated 30.11.20217 passed in case no. 10414/CIT(A)/DDN/2015-16, involving proceedings under sections 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
We notice at the outset during the course of hearing that both the learned lower authorities’ respective findings have disallowed the assessee’s expenditure claim of Rs.3,89,800/- against his consultancy income received from IIT, Roorkee to the tune of Rs.21,65,709/-; in assessment order dated 01.01.2016 and upheld in the lower appellate discussion.
3. The Revenue vehemently argues in support of the impugned disallowance that once the assessee’s impugned consultancy income has been held as a part and parcel of the salary, no such expenditure could be allowed against the same as per both the lower authorities’ findings under challenge. We find that the instant issue is no more res-integra as the tribunal’s earlier learned coordinate bench in Sukhbir Singh Jain Vs. DCIT dated 31st May, 2022 has already rejected the Revenue’s very stand as follows: “8. We have heard the rival submissions and perused the material available on record. It is an undisputed fact that assessee is a professor of IIT, Roorkee and has earned consultancy expenses and the net income from consultancy (after deducting 25% expenditure) was offered to tax under the head income from other sources. The claim of the assessee was disallowed by AO as the claim of expenses was on adhoc basis. We find that identical issue arose in group of cases bearing 6784, 6788, 6785, 6786/Del/1993 and corresponding CO's before the Delhi Benches. The Delhi Benches vide order dated 16.06.2000 has decided the issue in favour of the assessee by observing as under:
2 | P a g e “2. All the assessee were professors in the University of Roorkee and each of the assesses is an expert in his specialized field. The professors apart from receiving salary from the University of Roorkee, also received consultancy charges from the various organizations, both government and private, during the relevant assessment years. These amounts were received through the University of Roorkee. In most of the cases, consultancy was received by the Professors directly from those organizations. The University deducted a specified sum from the net amount payable to the professors, after deducting actual expenses incurred by them, in executing the contracts depending upon the facilities of the University utilized by them. The net amount received by the assessee were declared in the return of income under the head "income from other sources after claiming expenses of 25% therefrom on ad hoc basis. AO assessed the consultancy charges as income from salary and did not allow expenses claimed on the ad hoc basis.
I have heard the rival submissions. Both the parties agreed that the issue involved in the present appeals stands covered in favour of the asessee by the order of the Tribunal rendering in the case of Dr. Nizammudin of Roorkee University in dated 09.04.1996. Facts being identical, respectfully following the precedent, I uphold the impugned order.
4. In the Cross-Objections, assessee simply supported the appellate order. No grievance was projected. As such, I dismiss the same.
In the result, appeals of the revenue and the cross- objections of the assesses stand dismissed."
Before us, no distinguishing feature in the facts of the present case and that in the case of Shri Swami Saran (supra) has been pointed out by Revenue nor has Revenue placed any material on record to demonstrate that the order of Tribunal in the case of Shri Swami Saran (supra) has been set aside/overruled or stayed by higher judicial forum. We, therefore following the decision of the Co-ordinate Bench of Tribunal in case of Shri Swami Saran (supra) and for similar reasons set aside the adhoc disallowance made by AO. We therefore direct the AO to allow the claim of expenditure. Thus this Ground of assessee is allowed.”
We adopt the above extracted detailed discussion mutatis mutandis to allow the assessee’s instant sole substantive grievance in very terms.