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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI
Before: Sh. Saktijit DeyDr. B. R. R. Kumar
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by assessee against the order dated 30.01.2023 passed by the AO u/s 147 r.w.s. 144C(13) of the Income Tax Act, 1961.
Following grounds have been raised by the assessee:
“1. On the facts and circumstances of the case, the order passed by the learned Assessing Officer is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case, learned Assessing Officer has erred both on facts and in law in making the addition of Rs.19,96,331/- on account of salary without considering and appreciating Form 16 issued by the Employer.
3. That having regard to the facts and circumstances of the case, learned Assessing Officer has grossly erred in adding a sum of Rs.19,96,331/- Neeraj Garg to the income of the assessee having complete disregard to the explanations and submissions brought on records by the assessee during the course of assessment proceedings.”
The assessee was employed with M/s Coca Cola India Pvt. Ltd. & M/s Coca Cola India Inc. during the year under consideration and the source of income of the assessee was salary received from M/s Coca Cola India Pvt. Ltd. & M/s Coca Cola India Inc. and interest from saving bank accounts. The assessee filed return of income u/s 139 of the Income Tax Act, 1961 declaring income of Rs.5,01,34,895/-. The Assessing Officer proposed addition of Rs.19,96,331/- against the disclosed salary income of Rs.29,51,169/- on account of the entry dated 30.07.2012 of Rs.49,27,500/- in the bank account of HSBC.
Aggrieved with the proposed addition, the assessee filed objections before the ld. DRP.
During the hearing before the ld. DRP, the assessee submitted as under: “………the assessee had stated against the narrations of credits appearing in HSBC-account number 130102742006 dated 30.07.2012 of Rs.49,27,500/- (USD 90000), that the said credit was on account of “Salary & allowances” from M/s Coca Cola Inc. (copy of annexure 3 to submission dated 21.01.2022 enclosed for reference). Also, the assessee had explained as to why the difference of Rs. 19,96,331/- may not be assessed in his hands as salary income. The assessee filed his response on 14.03.2022 stating as under: "We have mistakenly interpreted bank entry of Rs.49.27,500/- dared 30.07.2012 as salary whereas it was a bank transfer of the accumulated
Neeraj Garg funds of Mr. Neeraj Garg In the narration of the transaction, HSBC Bank has reported "CO (i.e. care of) Coca Cola India Inc." that means name of the company was just mentioned for reference purpose and that amount was not actually received from the company." Your honor, we would like to clarify through letter that at the time of furnishing reply letter dated 21.01.2022, wherein credit of Rs.49,27,500/- was informed to be a Salary', the assessee was in abroad and could not inform us the true nature of credit in bank account. It is humbly accepted that due to non-coordination with the assessee, the said entry was informed to be a salary credit which subsequently was examined, verified and found that this credit is mere an inter-bank transfer from one Bank of the assessee to this HSBC Account, and not a salary credit at all. To make this clear, the assessee duly furnished "Form 16" issued by the employer Coca Cola India which certifies total salary to be Rs,29,31,169/-. (a) Form 16 issued by Coca Cola India Inc. should not be ignored or rejected. It is primary and conclusive evidence of a Salary Income of the assessee which clealy provides the amount of total salary, allowances and perquisites at Rs.29,31,169/-. (b) Also, we find no valid ground of rejecting or non-considering Form 16 brought on record by the assessee. (c) Further, Form 26AS statement should be considered which also shows that total salary income amounts to Rs.29,31,169/-. Therefore, if is humbly requested that the Form 16 and 26AS must be considered, taken on record and accordingly an addition of Rs.19,96,331/- lRs.49,27,500 - Rs.29,31,169] should be deleted. Mere an incorrect information furnished in previous responses should not be a valid ground of sustaining an addition to income of the assessee."
Neeraj Garg 6. The ld. DRP after having considered the rival averments directed the AO to consider and verify the assessee's contention made vide submissions as above including the reference mentioned above and also submission made by passing a speaking and reasoned order. The Panel also hastened to clarify that the AO shall not conduct any fresh inquiry in this regard; the verification shall be made on the basis of documents/submissions available on the records.
The AO repeated the draft Assessment Order treating the credit entries as under:
Date Amount Narration filed before the Narration Hon’ble DRP submitted on 21.01.2022 30.07.2012 68,43,750/- Neeraj Garg Ref. – Transfer of ESOP received funds to India Fx USD 125000.00 30.07.2012 49,27,500/- Neeraj Garg, fund transfer C/o Salary & Coca Cola India Inc. USD allowances 90000.00 13.03.2013 96,23,062/- ESOP received 8. Aggrieved, the assessee filed appeal before the ITAT.
Before us, the ld. AR reiterated the arguments taken before ld. DRP while the ld. DR relied on the order of the Assessing Officer.
Heard the arguments of both the parties and perused the material available on record.
We have gone through the copy of the return declaring gross total income of Rs.5,01,34,895/- and total income of Rs.5,00,22,395/-, computation of taxable income, details of TDS deducted from salary of Rs.1,56,27,132/-, From 26AS and also entry wise narration of the Citi bank a/c No. 5700187006
Neeraj Garg reflecting the salary received and HSBC account reflecting Rs.49,27,500/- on 30.07.2012 regarding the fund transfer of the ESOP and hold that no addition is called for on this account and that the Assessing Officer has erred in not following the directions of the ld. DRP in true spirit and erroneously determining the salary income from the ESOPs exercised.
In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 28/12/2023.