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Income Tax Appellate Tribunal, DELHI BENCH ‘DB’, NEW DELHI
Before: SH. ANIL CHATURVEDI & SH. CHALLA NAGENDRA PRASAD
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – Dehradun dated 17.05.2018 relating to Assessment Year 2013-14.
Brief facts of the case as culled out from the material on record are as under:-
3. Assessee is an individual and professor of IIT, Roorkee. Assessee filed his return of income for A.Y. 2013-14 on 31.03.2015 declaring total income at Rs.62,78,550/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 21.03.2016 and the total income was determined at Rs.76,23,760/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 17.05.2018 in Appeal No.24/10132/CIT(A)/DDN/2017-18 granted partial relief to the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds: 1. “That the order of Learned CIT(A) Dehradun is against Law and facts of the case.
2. That the 25% of consultancy receipts were held to be allowable in different appeals and matter was settled by Hon’ble ITAT New Delhi. The Learned CIT(A) did not accept the expenses claimed on the ground that he does not agree with the judgments.
3. That there were different judgments in appeals where 25% of consultancy receipts in case of IIT professors were held to be allowable though the professors did not maintain any accounts. Since A.Y. 2017-18, 50% deduction has been allowed are statute.
4. That the expenses of 25% claimed at Rs.13226227/- on consultancy receipts of Rs.5304910/- are allowable deduction and even the A/o Roorkee had instructed that expenses should not be claimed more than 25%.”
4. Before us, at the outset, Learned AR submitted that though the assessee has raised various grounds but the sole controversy is with respect to the denial of claim of 25% of expenses towards consultancy receipts.
5. During the course of assessment proceedings, AO noticed that assessee had shown receipts from consultancy amounting to Rs.53,04,910/- and had claimed adhoc expenses @ 25% i.e. Rs.13,27,227/- and had thus offered net income from consultancy at Rs.39,78,683/-. The assessee was asked to produce the relevant evidence regarding the expenditure claimed and also produced the documents to justify the same. Assessee inter alia submitted that assessee has claimed expenditure on adhoc basis and no books of accounts have been maintained by assessee. After considering the submissions of the assessee, the submissions of the assessee was not found acceptable to AO. AO was of the view that the assessee had to maintain the vouchers for claiming the expenses. He therefore disallowed the expenditure claimed by assessee. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who upheld the order of AO and thus dismissed the ground raised by Assessee. Aggrieved by the order of CIT(A), assessee is now before us.
Before us, Learned AR reiterated the submissions made before AO and CIT(A) and further submitted that on identical facts in the case of other professors of the IIT, similar expenses from consultancy income which were claimed by professors was disallowed by AO and when the issue was carried before the Hon’ble Tribunal, the Hon’ble Tribunal has decided the issue in favour of the assessee. He pointed to the copy of the order placed at Page 7 to 9 of the paper book. He further submitted that the order of Tribunal in those cases has been accepted by the Revenue as is also evident by letter dated 31.10.2005 written by ITO, Roorkee to the Registrar, IIT, Roorkee wherein considering the decision of the Tribunal in the case of Shri Swami Saran and others, the AO has noted the fact that the Revenue has accepted the decision of the Tribunal and accepts the 20% claim of expenditure. Learned AR therefore submitted the aforesaid order of Tribunal has attained the finality and since the facts of the assessee’s case are identical to that of the case decided by Tribunal, the claim of the assessee be allowed.
Learned DR on the other hand supported the order of AO.
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. 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.
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.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 31.05.2022