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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’, NEW DELHI
Before: SHRI SUDHANSHU SRIVASTAVA & SHRI O.P. KANT
Date of hearing 30.07.2019 Date of pronouncement 31.07.2019 ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 05/01/2016 passed by the Ld. Commissioner of Income-tax (Appeals)-9, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2010-11 raising following grounds:
(i) The assessee company had filed its return of income of Rs.1,03,59,313/- U/s 115 JB (Book Profit) on 15.09.2010 and AO passed his order dt: 04.03.2013 at Book Profit u/s 115JB of Rs.1,03,59,313/-. There was regular income of Rs.56,43,350/- as per return, which has also been assessed accordingly. (ii) The assessee company has also filed a revised computation of income during the course of assessment (Copy enclosed). (iii) The assessee had income from Interest, Lease charges on fixed assets, compensation on acquisition of its agricultural land.
(iv) In the original return, the company assessee had taken the gross receipt of Rs.1,05,20,891/- as interest on the basis of Form No. 16-A received from the Land Acquisition Officer, Estate Department Rohtak, as other documents were not available / traceable at the time of filing return & accounts. On their availability this statement of computation of income was revised in the course of assessment, before the Learned AO. TDS had been deducted on the total amount paid to the assessee and it included both compensation of Rs. 35,04.044/- and Interest of Rs.70,16,847 U/s 194LA. The compensation was exempt from Income Tax U/s 2 (14) (iii) (b) while the interest is taxable U/s 56 as income from other sources. The Learned AO has not accepted it and has assessed the entire income as interest income wrongly. It is a mistake of law and facts and so rectifiable at this stage in the course of assessment as the AO has to make the correct assessment as per law.
2. The Learned AO is wrong in law and on the facts of the case in not accepting the revised computation of income and making correct assessment as per information and explanation given to him in the course of assessment.
3. The learned CIT (A) is also wrong in law and on the facts of the case in not accepting the revised computation of income and making correct assessment as per information and explanation given to him in the course of assessment, in the appeal filed before him, vide his Order dt. 05.01.2016 4. The detailed submissions will be made at the time of hearing of the case.
5. The assessee reserves his right to make any changes or additions in the grounds of appeal
6. It is prayed that the above relief may kindly be allowed meet the ends of justice and law, and our income should be assessed as per revised computation of income.
We have heard the rival submission of the parties in the light of orders of the lower authorities and material placed on record by the parties, including paper-book (page-36) filed by the assessee.
Briefly stated facts of the case are that the assessee filed return of income on 15/09/2010 declaring income of Rs.56,43,350/- under regular provisions of the Income-tax Act, 1961 (in short ‘the Act’) and book profit of Rs.1,03,59,313/-under section 115JB of the Act. The tax was paid on the book profit declared. During the year under consideration, the assessee received enhanced compensation along with interest in respect of the land acquired by the land acquisition officer, Estate Department, Rohtak. In the return of income filed the assessee had taken gross receipt of Rs.1,05,20,891/-as interest on the basis of form number 16-A issued by the land acquisition officer. It is claimed by the assessee that at the time of filing of the return of income only this document was available before the assessee. It is claimed that on availability of statement in Form D (copy available on page-7 of paper-book) of details of income, computation of the income was revised during assessment proceeding before the Ld. Assessing Officer. According to the assessee, tax was deducted at source (TDS) on the composite amount of enhanced compensation of Rs.35,04,044/- and interest of Rs.70,16,847/-under section 194LA of the Act. The assessee claimed that enhanced compensation received of Rs.35,04,044/- was exempt from income tax under section 2(14)(iii)(b) of the Act, whereas the interest is taxable under section 56 of the Act as “Income from other sources”, subject to 50% deduction. The assessee claimed before the learned Assessing Officer that inadvertently not making claim of exempt income in the return of income was a mistake of the law and rectifiable at the stage of original assessment, however, said claim of the assessee was rejected by the Assessing Officer on the ground that the assessee did not revise its return of income for claiming the said exemption. The Ld. CIT(A) also upheld the finding of the Assessing Officer. According to him in view of the ratio led by the Hon’ble Supreme Court in the case of Goetze India Ltd Vs. CIT 284 ITR 323(SC), the assessee was required to revise its return of income and so the claim was not acceptable.
We find that Hon’ble Delhi High Court in the case of CIT Vs Bharat General Insurance Company Limited, 81 ITR 303 (Del) held that “it was incumbent on the Income Tax Department to find out whether a particular income was assessable or not and merely because the assessee wrongly included the income in its return of income for particular year, it could not confer jurisdiction on the Department to tax that income in that year even though legally such income was not taxable as per law”. In the case of CIT versus Jai Parabolic Springs Ltd 306 ITR 42 (Del), the Hon’ble Delhi High Court held that “the Tribunal had power to allow deduction for expenditure to assessee to which it was otherwise entitled even though no claim was made by the assessee in the return of income”. The Hon’ble Gujarat High Court in the case of SR Koshti 276 ITR 165 (Guj.) held that “if an assessee under a mistake, misconception or not being properly instructed, is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected”. In the case of Pt. Sheo Nath Prasad Sharma versus CIT 66 ITR 647 (All), it is held that “it is the duty of the Assessing Officer to determine whether a particular receipt is taxable or not and just because the assessee has shown the receipt as income in his return, it does not make him liable to tax thereon”.
In the instant case before us no fresh claim has been made by the assessee and only claim made is to assess the income in accordance with the provisions of the law.
Further, the Hon’ble Supreme Court in the case of Goetze (India) Limited (supra) has not restricted appellate authorities from entertaining a fresh claim. The relevant finding of the Hon’ble Supreme Court is reproduced as under:
4. The decision in question is that the power of the Tribunal under s. 254 of the IT Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the AO to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Tribunal under s. 254 of the IT Act, 1961. There shall be no order as to costs.
In view of the decisions of the Hon’ble Court’s discussed above, the finding of the Ld. CIT(A) of rejecting the enhanced compensation of Rs.35,04,044/- as exempt under section 2(14)(iii)(b) of the Act, though not claimed in the original return of income, is set aside. The Ld. Assessing Officer is directed to treat the enhanced compensation of Rs.35,04,044/-, out of the gross receipt of Rs.1,05,20,891/-offered by the assessee in the original return of income, as exempt from Income-tax. The grounds of the appeal are accordingly allowed.
The assessee has also filed additional ground of the appeal on 15/05/2019 claiming to provide credit of tax deducted at source. The relevant ground is reproduced as under: “On the facts and circumstances of the case the authority in below have erred both on facts and in law by not allowing Credit of Rs.23,84,034/- for Tax Deducted at Sources (TDS) on interest and enhances compensation received from Land Acquisition Officer Urban Estate Deptt. Hr. Rohtak on the basis of Form No. 16A dated 16.10.2009 as the same is not appearing in Form 26AS.”
The request of the additional ground of the assessee was not objected by the Ld. DR. We have also examined that the issue involved is only of the verification of the taxes collected on behalf of the assessee for which assessee is entitled to get the credit. Accordingly, the matter is restored to the file of the Ld. Assessing Officer for verifying the credit of Rs.23,84,034/- for tax deducted at source from the relevant documents filed by the assessee and also from the records of the Department and allow the credit in accordance with law. The additional ground of the appeal, is accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 31ST July, 2019.