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Income Tax Appellate Tribunal, “D”, BENCH KOLKATA
Before: SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM
O R D E R
Per Dr. Arjun Lal Saini, AM:
The captioned appeal filed by the assessee, pertaining to the Assessment Year 2011-2012, is directed against the order passed by ld. Commissioner of Income Tax (Appeals)-6, Kolkata, in Appeal No.254/CIT(A)-6/Kol/2014-15, dated 29.06.2016, which in turn arises out of an order passed by the Assessing Officer (AO) Under Section 143(3) of the Income Tax Act 1961, (in short the ‘Act’), dated 28.03.2014.
Brief facts of the case qua the assessee are that the assessee filed its return of income on 24.07.2011 declaring net income of Rs.9,99,740/-. The assessee also claimed deduction u/s.24(b) of the Act at Rs.1.50 lakhs in respect of interest paid on housing loan. The assessee’s case was selected for scrutiny u/s.143(3) and the AO has completed the assessment by making the addition of Rs.1.50 lakhs on account of interest on house building loan, Rs.9,52,347/- as undisclosed income and Rs.7918/- as undisclosed bank interest. before the CIT(A), who has confirmed the addition made by the AO by observing the followings :-
“4.3. I have considered the appellant’s submissions. He has argued, in detail, in the submission and the grounds of appeal in general terms as to why the addition was incorrect but he has not reconciled the basic factual discrepancy at all. The AO had logically analyzed the deposits and withdrawals of the appellant and accepted his claim regarding reimbursement of expenses worth Rs.19,39,856(about which the appellant argued, in vain, in his written submissions and grounds of appeal). The appellant has also misunderstood the AO's inference of the basis of an amount of Rs.4,00,000 transferred to the second bank account that it was not available for expenses. The appellant has only stated that transfer from one bank account to another bank account cannot be treated as income. The AO's estimate of household expenses of Rs.1,80,000 also cannot be considered unreasonable. Thus, the unexplained difference of Rs.9,52,347 between the expected expenses out of the bank account and the actual expenses evident from the bank account. The difference representing amounts received by the appellant from his employer or some other person wrongly claimed as reimbursement of expenses and/ or unexplained expenditure computed by the AO is very reasonable for which the appellant has no specific explanation. Hence, the appellant's grounds of appeal on this issue and arguments are rejected and the addition of Rs.9,52,347 is confirmed. 5.1. The appellant had not taken any specific ground of appeal against an addition of Rs.7918 on account of interest on savings bank account not declared by him but he stated as under during the appellate proceedings: "Disallowance of Rs. 7918/ - being the interest not disclosed in the return may not be considered as significant considering the amount involved. Since the amount is very meager, the same may be considered as insignificant" 5.2 The appellant's arguments that taxable income be ignored because it is insignificant is not correct. The addition of Rs. 7918 is confirmed.”
Not being satisfied with the order of ld. CIT(A), the assessee is in further appeal before us, and has taken the following grounds of appeal :-
3 Sri Sumit Saha A.Y.2011-12 REVISED GROUNDS OF APPEAL
1. That Id CIT(A) has erred in sustaining disallowance of Rs.1,50,000/- (Rs. One Lakh Fifty Thousand Only) towards interest u/s 24(b) of IT Act., 1961.
2. That Id CIT(A) has erred in confirming difference of Rs. 9,52,347/- (Rupees Nine Lakh Fifty Two Thousand Three Hundred Forty Seven Only) towards allowances exempt from tax.
3. That appellant craves leave to add, alter, amend any of the ground during hearing.
5. Ground No.1 relates to disallowance of Rs.1.50 lakhs towards interest u/s.24(b) of the I.T.Act, 1961.
5.1 Ld. AR for the assessee has submitted before us the certificate from IDBI Bank and possession certificate from West Bengal Housing Board and explained before us that assessee has paid interest of Rs.1.50 lakhs on housing loan and, therefore, he is entitled to claim deduction u/s.24(b) of the Act. The Ld. AR also pointed out that the assessee did not submit the certificate from IDBI Bank and the possession certificate from West Bengal Housing Board, neither to the AO nor to the ld CIT(A).
Based on the IDBI Bank certificate and the possession certificate from the West Bengal Housing Board ld. AR for the assessee has requested us to give the benefit of Rs.1.50 lakhs u/s 24(b).
5.2. On the other hand, ld. DR for the revenue has stated that the certificate from IDBI Bank and possession certificate from West Bengal Housing Board were not submitted by assessee neither to the AO nor to the ld. CIT(A). Therefore, these two documents are additional evidence and opportunity should be given to AO to examine these documents, these documents afresh.
Having heard the rival submissions, perused the material on record, we are of the view that there is merit in the submissions of ld. DR for the Revenue. As the ld. DR has pointed out that the assessee has submitted fresh evidence before the Bench and these fresh evidence i.e. Certificate from IDBI Bank and possession certificate from West Bengal Housing Board should be examined by the AO. Considering the factual position, we are of the view that the additional evidence submitted by the assessee should be examined by the AO, therefore, we direct the ld. AO to examine the fresh evidence and may allow benefit to the assessee.
Ground No.2 relates difference of Rs.9,52,347/- towards allowance exempt from tax.
Ld. AR for the assessee has submitted before us the calculation of the difference amount of Rs.9,52,347/- as follows :-
As per Order Amount (Rupees in lac) Reimbursement of expenses(A) 19.40 Withdrawal from bank (B) 15.68 Less Transfer to Joint account(C) 4.00 Less Drawings (D) 1.80 Withdrawals for expenses(E)-{(B)-(C)-(D)} 9.88 Mismatch in withdrawal (F) (A-E) 9.52 The ld AR submitted that there is no variation in the return of income and FORM NO. 16 enclosed which is Rs.9,99,740/- Further this expenses are incurred for the purpose of employment and is exempt under section 10(14). Moreover, there is no evidence to support the fact that expenses are inflated. These expenses were paid by credit cards, subsequent transfer to joint account maintained with his father only represents reimbursement made to him towards sum utilized from this account earlier. Further department wide order dated 22.01.2016 U/s. 147/143(3) of the IT Act, 1961 for A.Y. 2010-11 had not made any addition under same facts.
The ld AR for the assessee also relied on the judgment in the case of Dhakeswari Cotton Mills V. ClT 26 ITR 775 (SC) wherein it has been held that AO is not entitled to make a pure guess. Accordingly, the addition may be kindly deleted.
On the other hand, ld. DR for the revenue has primarily reiterated the stand taken by the AO, which we have already noted in our earlier para and is not being repeated for the sake of brevity.
Having heard the rival submissions, perused the material on record, we are of the view that there is merit in the submissions of the assessee, as the proposition canvassed by ld. AR for the assessee are supported by the facts narrated by him above. The Ld. AR for the assessee has explained that the same reimbursement amount in assessment year 2010-11 has not been added by the AO as a part of salary. It was considered by the AO as a part of reimbursement and the ld. AR also pointed out that the AO should follow the consistent approach in making the disallowance of expenditure. If the AO had not disallowed the same kind of expenditure in A.Y 2010-11 then the said reimbursement expenditure also be not disallowed in the subsequent assessment year
6 Sri Sumit Saha A.Y.2011-12 2011-12. Considering the factual position, we are of the view that the addition made by the AO and confirmed by the ld. CIT(A) needs to be deleted. Accordingly, we delete the addition. 12.In the result, appeal filed by the assessee on this ground, is allowed. Order pronounced in the open court on this 13/01/2017.
Sd/- Sd/- (A.T.VARKEY) (DR. A.L.SAINI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER कोलकाता /Kolkata; �दनांक Dated 13/01/2017 �काश �म�ा/Prakash Mishra,�न.स/ PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant- Sumit Saha 1. 2. ��यथ� / The Respondent.-ITO Ward-1(4), Hooghly 3. आयकर आयु�त(अपील) / The CIT(A), Kolkata. 4. आयकर आयु�त / CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कोलकाता / DR, ITAT, Kolkata 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//