DCIT, NEW DELHI vs. M/S O.P. SRIVASTAVA, LUCKNOW

PER R.K. PANDA, ACCOUNTANT MEMBER:-

3. The A.O further made addition of Rs. 3 lakhs being the value of perquisites on account of chauffer driven car, Rs. 98,128 on account of credit card expenses, Rs. 2,55,408/- on account of domestic servants, Rs. 35,537/- on account of telephone and mobile expenses. During the course of assessment proceedings, the A.O further observed from perusal of Savings Bank Account No. SB-3 with Hindustan Cooperative Bank Ltd [HCBL], Aliganj, Lucknow and A/c No. 3130101100032 with Bank of Rajasthan, Aliganj, Lucknow that the assessee had made cash deposits on different dates amounting to Rs. 9,57,597/-. In the absence of any reply to his satisfaction, the A.O made addition of Rs. 9,57,597/- as cash credits u/s 68 of the Act.

4. In appeal, the ld. CIT(A) following the order of the Tribunal in assessee’s own case for A.Y 2007-08, allowed the claim of the assessee in respect of taxing salary income under the head ‘income from salary’ as against ‘income from other sources’ considered by the A.O. Similarly, he also deleted the addition of Rs. 3 lakhs on account of estimated perquisite value of chauffer driven car provided to the assessee, Rs., 2,55,408/- added by the A.O on account of estimated value of three domestic servants, Rs. 35,537/- made by the A.O on account of telephone expenses and addition of Rs. 9,57,597/- made by the A.O on account of cash credit.

“1. The order of Ld. CIT(A) is not correct in law and facts

2. On the facts and circumstances of the case the Ld. CIT(A) has erred in allowing the appeal of the assessee in respect of taxing the salary income under the head "Income from Salary" as against charged to tax under the head "Income from Other Sources" by the AO u/s 2(24)(iv) of the I.T. Act, 1961.

3. On the facts and circumstances of the case the Ld. CIT(A) has erred in allowing the appeal of the assessee regarding deduction claimed u/s 10(13A) of the I.T. Act, 1961 in respect of rent paid for his residential property.

4. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.3,00,000/- made by the AO on account of estimating perquisite value of Car and Chauffer provided to the assessee.

5. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.2,55,408/- made by AO on account of estimating the value of Three Servants to income of the assessee.

6. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.35,537/- made by the AO on account of telephone expenses.

7. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.9,57,597/- made by the AO on account of cash credit being deposits in the bank account of the assessee in absence of any explanation with regard to source of cash deposits.”

6. The ld. counsel for the assessee, at the outset, filed a copy of the order of the Tribunal, in assessee’s own case for A.Y 2007-08 vide order dated 01.12.2011 and contended that the Tribunal has decided identical issue by dismissing the appeal filed by the Revenue against the order passed by the ld. CIT(A). He accordingly submitted that since the issue has been decided in favour of the assessee, the grounds raised by the Revenue should be dismissed.

7. The ld. DR on the other hand while supporting the order of the A.O, could not controvert the factual position and fairly conceded that the issue raised in this appeal stands covered in favour of the assessee by the order of Tribunal [supra] in assessee’s own case for A.Y 2007-08.

8. We have considered the rival arguments made by both the sides. Perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. We find identical issue had come up before the Tribunal in assessee’s own case for A.Y 2007-08. We find the Tribunal, following the decision of the Tribunal in assessee’s own case for A.Ys 2003- 04 to 2006-07 has dismissed the appeal filed by the Revenue in order dated 01.12.2011 for A.Y 2007-08. The relevant observation of the Tribunal from para 2 onwards read as under:

“2. The assessee filed the return of income showing an income of 1,01,532/- which comprised of a sum of Rs. 93,22,659/- on account of salary from M/s Sahara India Commercial Corporation Ltd. M/s Sahara India Financial Corporation Ltd. inclusive of income from other sources of Rs. 11,13,263/-. The Assessing Officer added the following amounts to the income of the assessee on account of perquisites:-

1. Chauffeur driven car (3,00,000-26,400) Rs. 2,73,600/- 2. Residence and furniture Rs. 48,940/- 3. Credit card expenses Rs. 27,539/- 4. Domestic Servant Rs.2,48,898/- 5. Telephone Expenses (20% of disallowance relating to telephone) Rs. 33,750/- 6. Cash credit Rs.2,00,000/-

Nos.504, 1609, 1608 & 1610/Del/2010 and CO. Nos. 157/Del/2011, 156/Del/2010 & 158/Del/2010.

5, On the other hand, the learned DR relied upon the order of the Assessing Officer. The issue of perquisites on account of domestic servants, telephone and mobile and furniture, credit card chauffeur driven car and addition made in respect of cash credit and also considered by the Tribunal in assessee’s own case and all these additions were deleted with the following observations:

"11. Ground no.4 in all the appeals is against deleting addition made on account of perquisites. The issues are covered by the decision of Hon'ble ITAT G' Bench, New Delhi in case of Subrata Roy Sahara in for A.Y. (j 2007-08 dt. 4,11.2010and also in the case of J.B.Roy in ITA 1569 to 1571/Del/10 dt. 31.8.2010 . On the expenses of servants. telephone, cell phone and chauffer driven car the Hon'ble ITAT decided as in the case of Subrata Roy Sahara (cited supra). On the issue of concessional rent the Hon'ble ITAT decided the issue as in the case of J.B.Roy cited supra as under.

"para 6.2 As regards the issue of concessional rent, Id. counsel of the assessee referred to the aforesaid Tribunal's order in assesee's own case wherein vide para 6 following has been held.

"Apropos addition on account of concessional rent including the benefit of furniture and fixture, ITAT in A.Y 1999-2000 has held that these premises are not owned by the firm, there is no change in the facts which is agreed by both parties. Following the order of ITAT order we uphold the order of CIT(A) in deleting the additions on account of concessional rent including benefits arising out of furniture and fixture. This ground of revenue is dismissed."

12. Ground no.5 in ITA 1609/Del/2010 is decided as under. We have heard both the sides. The issue involved in ground no.5 is regarding deletion of addition of Rs. 3,00,000/- u/s 68 of the I.T.Act. This was the amount deposited in the assessee's bank account on 12.1.2005 at Union Bank of India. After hearing both the sides we find that the assessee was having substantial cash withdrawals prior to the deposits made in the bank. It is also noted that as per the Wealth Tax return the assessee was also having cash balance of Rs. 1,50,000/- at the beginning of the F.Y. i.e. 1.4.2004. The cash withdrawal prior to the deposits were of Rs. 20 lakhs. Keeping these facts in view we sustain the order of Id.CIT(A) and dismiss the Revenue

8, Ground no.3 in all the appeals is covered by the decision- of Hon'ble ITAT in ITA 1569 to 1571/Del/2010 for A.Ys 2002-03 , to 2006-07 respectively in the case of CIT Vs. J.B. Roy vide order dated 31.8.2010 wherein the Hon'ble ITAT in para 5 has held as under:

"Another common issue is that Ld.CIT(A) has erred in directing the AO to allow the deduction claimed by the assessee u/s 10(13) of the I. T. Act.

On the issue Ld. counsel of the assessee submitted that this issue is again covered by the aforesaid Tribunal's order in to 1648/Del/2008 dated 4.6.2009 wherein, in para 7 following has been held:

"Apropos remaining ground i.e. deduction u/s 10(13A) there is no change in the fact following the ITAT order of A.Y. 1999 2000 we hold that the CIT(A) has rightly allowed deduction u/s. 13A. This ground of revenue is dismissed.

Since the CIT(A) has followed the above order in his appellate order, we do not find any infirmity in the order of the CIT(A) and hence, con firm the same." 9. The CIT(A) has granted the relief by holding as under:

"This ground is in respect of denial of deduction claimed by the appellant u/s 10(13A) of the Income Tax Act in respect of house rent paid. In the entire assessment order there is no whisper as to why the j claim of the appellant u/s 10(13A) has been disallowed by the Ld.AO and, therefore, the appellant has only inferred that since the Ld.AO has subjected salary income received by the appellant to tax as income from other sources he has not allowed the claim of the appellant in resjdect1 of house rent u/s 10(13A) of the I.T. Act.

The appellant is paying house rent for his residential accommodation occupied by him by way of deduction from salary income and has claimed deduction u/s 10(13A) in respect thereto. The Ld.AO because of treating salary income to be in the nature of income from- other sources has deemingly denied the claim of the appellant, u/s 10(13A). Deduction u/s 10(13A) claimed by the appellant is as follows, the least of the following. a) HRA Rs. 4,54,000/- b) Rent paid in excess of 10% of the salary Rs. 4,56,400/ c) 40% of salary Rs. 6,94,400/-

Exemption u/s 10(13A) accordingly works out to Rs. 4,54,000/-. This figure stands duty supplied to the department during the course of the assessment proceedings and is already on record and has been accepted by the department. Since the disallowance nature because of treatment of salary income as income from other sources it is prayed that deduction u/s 10(13A) of the I.T.Act may kindly be allowed to the appellant.

I have gone through the assessment order and / find no discussions in this respect in the assessment order. It appears that this deduction has not been allowed to the assessee consequentially to the treatment of his income under the head salaries as income from other sources.

Since / have already held that the income of the appellant from salary should be assessed under the head salaries and not income from other sources. / direct the AO to allow the deduction of Rs. 4,54,000/- claimed by the appellant u/s 10(13A) as the quantum of the same has not been disputed. direct the A.O accordingly."

Respectfully following the decision of Hon'ble ITAT on the same facts, we dismiss this ground of revenue's appeal.

by the Revenue are dismissed. [A.Y. 2008-09] 10. Grounds raised by the Revenue read as under; "On the facts and in the circumstances of the case, the ld. CIT(A) has erred in

2. On the facts and circumstances of the case the Id. CIT(A) has erred in allowing the appeal of the assessee in respect of taxing the salary income under the head "Income from Salary" as against charged to tax under the head " Income from other Sources" by the AO u/s 2(24)(iv) of the I.T. Act, 1961

3. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.3,00,000/- made by the AO on account of estimating perquisite value of Car and Chauffer provided to the assessee.

4. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 4,44,171/- made by A.O on account of estimating the value of Three Servants to income of the assessee.

5. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.22,439/- made by the AO on account telephone expenses.

6. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.89,424/- made by the A.O on account of credit card expenses.

7.On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.5,49,450/- made by the AO on account of foreign travel expenses.

CO. No. 66/DEL/2013 [A.Y. 2008-09]

“That the ld. CIT(A) has erred in law and on facts and circumstances of the case in not adjudicating Ground No. 7 of the grounds of appeal with reference to addition of Rs. 98,128/- made by the A.O in relation to payment by credit card which was objected to by the respondent.”

(1) That the appellant objects to the determination of total income at Rs. 1,73,63,240/- and creation of demand of Rs.8,49,160/- thereby. (2) That on the facts and circumstances of the case the Ld. Assessing Officer is not justified in treating and taxing salary income received by the appellant as income within the meaning of section 2(24)(iv) of the Income Tax Act under the head “Income from other sources” as against under the head “Salaries”. (3) That the Ld. Assessing Officer is not justified in denying deduction claimed by the appellant under section 10(13A) of the Income Tax Act in respect of rent paid for his residential property. (4) That on the facts and circumstances of the case the Ld. Assessing Officer is not justified in treating the perquisite value of the car provided to the appellant by the employer at Rs. 3 lacs and thereby making an addition of Rs.2,73,600/- ignoring the applicability of Rule 3 of the Income Tax rules which are mandatory in nature.

(5) That the Ld. Assessing Officer is not justified in estimating the perquisite value of three servants at Rs.2,55,408/- and adding the same to the income of the appellant without any material on record only on surmises and conjectures and estimates following and repeating the addition made in earlier year.

(6) That on the facts and circumstances of the case the Ld. Assessing Officer is not justified in adding a sum of Rs.35,537/- on account of alleged perquisite value of telephone expenses in the hands of the appellant. (7) That in any view of the matter, there is no justification in adding perquisites value which have been estimated by the Ld. Assessing Officer merely on surmises and conjectures in respect of Driver, Servants, telephone expenses and credit card expenses. (8) That without prejudice in any view of the matter the addition of perquisites amounting Rs.6,89,073/- is uncalled for and contrary to the facts and circumstances of the case and law, alternatively highly excessive. (9) That on the facts and circumstances of the. Case the Ld. Assessing Officer is not justified in adding a sum of Rs.9,57,597/- to the income of the appellant in respect of cash credit in the bank account by treating the same as unexplained deposit under section 68 of the Income Tax Act. (10) That the addition of Rs.9,57,597/- has been made to the income of the appellant under section 68 by treating good explanation as no explanation merely on conjectures and surmises and the same is contrary to the facts and circumstances of the case and not tenable in law. (11) That the Ld. Assessing Officer is not justified in initiating penalty proceedings under section 271(1)(c ) of the Income Tax Act. (13) That the order passed by the Ld. Assessing Officer is without .proper opportunity and bad in law.

(14) That the various allegations made by the Ld. Assessing Officer in the assessment order are prejudice and malicious and factually and legally incorrect.

(15) That the order passed by the Ld. Assessing Officer is against the merits, circumstances and legal aspect of the case.