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Income Tax Appellate Tribunal, “C(SMC
Before: Shri A. T. Varkey, JM]
ORDER Per Shri A.T.Varkey, JM This appeal filed by the assessee against the order of Ld. CIT(A)-22, Kolkata dated 01.09.2017 for AY 2013-14.
The assessee has raised the following grounds of appeal: “1. That the CIT(A) totally erred in ignoring the Interest on HBL Rs. 33,950/- u/s. 24 and repayment of HBL Rs. 1,64,266/- u/s. 80C without calling for the records, without offering any valid reason for non consideration and such an action cannot be sustained and the claim has to be allowed.
2. That the CIT(A) totally erred in taking the gross figure of Rs. 8,18,000/- u/s. 194J without considering air fare + Hotel expenditure of Rs. 60,000/- out of professional income for joining ships and leaving and for which the appellant had shown net figure for Rs. 7,58,000/- and is entitled to a relief Rs. 60,000/- which should be allowed.
3. That the CIT(A) was not justified in confirming the addition of Rs. 3,68,729/- as undisclosed income from commodity Exchange whereas as per details filed, there was a speculation loss of the said amount and not profit not eligible for set off as per evidence filed. It was no where discussed how loss turned into a profit, cannot be sustained and has to be deleted.
Purnendu Ghosh, AY:2013-14 4. That the CIT(A) did not go through the cash flow statement at all explaining source of deposit of Rs. 4,00,000/- and erred in confirming the addition as undisclosed income on frivolous ground, without any merits which cannot be sustained and should be deleted.
5. That the CIT(A) failed to consider that no details of the alleged credit card payment of Rs.2,87,232/- was made available at any time, which was mainly operated by the wife of the appellant, having independent source of income, and such an action being totally inconsiderate, cannot be sustained and has to be deleted.
That the appellant craves leave to raise any other ground or grounds at the time of hearing of the appeal”.
However, at the outset itself the Ld. Counsel for the assessee brought to our notice that the assessee is a Merchant Naval Officer and was not well conversant with 26AS and also that of the Income Tax Act and the requirement of law as to filing of his own return. According to Ld. AR, the assessee was employed with the Dredging Corporation of India Ltd. for some time on salary basis and tax was duly deducted for it u/s. 192 of the Act and it was included in his return but not the other income for want of supporting particulars and evidence like Form 16 etc. It was brought to my notice that the assessee had contractual agreement with Naik Shipping and KNK Shipping for the year and there was certain unintentional omission for the reason of being ignorant about the complexities of Income Tax Act. So, when the AO confronted the assessee with 26AS in his possession and asked the assessee about certain income not being reflected in his return of income, he realized his mistake and immediately a revised computation of income/reconciliation with 26AS was filed with the AO on 16.12.2015. However, according to Ld. AR, the AO ignored the revised computation and made certain disallowances and additions which were challenged before the Ld. CIT(A); and even though the fact of non-consideration of revised computation by the AO was brought to the notice of the Ld. CIT(A) by raising ground no. 1 and 7, it has been apprised that the Ld. CIT(A) has not touched upon this main grievance of the assessee that the AO did not consider the revised computation of income filed before him on 15.12.2015. So, the prayer of the Ld. AR is that the revised computation of income may be taken into consideration while doing the assessment. For that he relied on the order of the Hon’ble Delhi High Court in CIT Vs. M/s. SAM Global Securities Ltd. in ITA 214/2013 dated 02.09.2013. The plea of the Ld. AR is stoutly opposed by the Ld. DR.
Purnendu Ghosh, AY:2013-14 According to Ld. DR, the assessee omitted to reflect certain income in his return of income which the assessee received from various sources and when this fact was detected and confronted by the AO, he tried to wriggle out of the problem by filing a revised computation of income which cannot be accepted because as per sec. 139(5) of the Act, assessee had to file a revised return within the time allowed and not revised computation. Therefore, the AO rightly did not entertain the revised computation. So, he does not want us to interfere with the order of the Ld. CIT(A).
4. After having heard the rival submissions and gone through the facts and circumstances of the case it is noted that the assessee is a merchant navy officer and has filed his return of income without reflecting certain income which fact when confronted by the AO, the assessee realizing his mistake immediately filed revised computation of income which was ignored by the AO and, therefore, certain disallowance/additions were made against the assessee. In the appellate proceeding, the Ld. CIT(A) also has not considered the grounds raised
specifically by the assessee on this issue. It is trite law as held by the Hon’ble Supreme Court of India in ITO Vs. Ch. Atchaiah 218 ITR 239 (SC) that under the present Act (Income Tax Act, 1961), the ITO has no option like the one he had under the 1922 Act. He can and he must tax the right person alone. In this case, the Hon’ble Supreme Court has given the proposition of law that income tax has to be levied from the right person, for the right year and the right income. In case, as in this case the assessee inadvertently or ignorantly has omitted to show certain income, the department has to confront him and seek his explanation and thereafter tax the right income for the right year from the hands of the right person. And it has to be kept in mind that ignorance of an assessee should not be taken advantage by the department. A reference is made to the decision of Hon’ble Supreme Court in CIT Vs. P. Firm (1965)
56. ITR
67. (SC) and Circular No. 114XL 35 of 1955 issued by the CBDT on 11.04.1955 that AO must not take advantage of the ignorance of the assessee as to his rights. It has to be kept in mind that what is required to be determined is the taxable income of the assessee in accordance with law. It is taken note that the case law relied by Revenue in the case of Goetz India Ltd. Vs. JCIT
Purnendu Ghosh, AY:2013-14 (2206) 284 ITR 323 (SC) the facts were different and facts in that case was that the assessee claimed deduction by way of a letter before the AO which was disallowed by AO on the ground that there was no provision under the Act to make amendment in the return without filing a revised return was upheld by the Hon’ble Supreme Court wherein it was made clear that the decision was limited to the power of the assessing authority to entertain the claim for deduction otherwise than by a revised return and did not impinge on the power of the Tribunal. Therefore, in view of the aforesaid proposition of law and being the final fact finding body and in the interest of justice and fair play to both parties, I admit the revised computation of income and am inclined to remand the issue along with it back to the AO to frame the assessment de novo and the assessee’s claim to be adjudicated in accordance to law. Consequently, the impugned order of Ld. CIT(A) is set aside, and the matter is remanded to AO for de novo assessment after taking into consideration the revised computation of income filed by the assessee on 15.12.2015 which I have admitted as aforestated and the assessee’s claim to be decided in accordance to law. For doing so, I rely on the order of the Hon’ble Delhi High Court in M/s. SAM Global Securities (supra). Therefore, appeal of assessee is allowed for statistical purposes.
In the result, the appeal of assessee is allowed for statistical purposes.
Order is pronounced in the open court on 13th March, 2019. Sd/- (Aby. T. Varkey) Judicial Member Dated : 13th March, 2019 Jd.(Sr.P.S.) Purnendu Ghosh, AY:2013-14 Copy of the order forwarded to:
Appellant – Shri Purnendu Ghosh, C/o Monoj Dutta, Ld. CIT(A), 1B, Old Post Office St., R/No. 8, 1st floor, Kolkata-700 001. Respondent - DCIT(International Taxation), Circle-2(1), Kolkata. 2 3. CIT(A)-22, Kolkata(sent through e-mail)
CIT, . Kolkata.
5. DR, ITAT, Kolkata. (sent through e-mail)