Income Tax Appellate Tribunal - Delhi
Income-Tax Officer vs Smt. Harbans Kaur on 29 March, 1993
Equivalent citations: [1993]45ITD470(DELHI)
ORDER
R.M. Mehta, Accountant Member
1. The revenue in this appeal is aggrieved with the action of the DC (Appeals) raising for our consideration the following effective ground:-
On the facts and in the circumstances of the case, the learned DC (Appeals) was not justified in directing to :-
(i) allow a relief of Rs. 15,000 on earning interest income charged under the head 'Income From Other Sources' out of expenses of Rs. 17,643 disallowed by the ITO.
2. The respondent in this case is an individual deriving income from house property and bank interest. In respect of interest from bank, she reflected in her income-tax return a figure of Rs. 54,683, which comprised of interest from FDR to the tune of Rs. 54,073 and saving bank interest to the extent of Rs. 610. Against the aforesaid income, she claimed a deduction of Rs. 17,643 "being conveyance to the bank at Kasturba Gandhi Marg, New Delhi". On being asked to substantiate the aforesaid claim, the counsel stated before the ITO that the assessee got interest on her FDR periodically and the aforesaid expenditure had been incurred towards the earning of the same. The ITO, however, rejected the claim for the following reasons:-
(i) The assessee's account had been credited by the bank and no expenditure was required to be incurred to earn the interest income.
(ii) No documentary evidence had been furnished in respect of the expenditure incurred.
3. Being aggrieved with the order passed by the ITO. the assessee came up in appeal before the DC (Appeals). In the course of these proceedings, it was contended on her behalf that she was an old lady and a widow having no children or anybody else to look after her. It was also stated that she was living all by herself and had fixed deposits in the bank income where from, was returned for the purposes of taxation. It was also contended that she had to manage her own affairs and had to incur expenditure to the tune of Rs. 1,500 per month to earn interest income which in the year of appeal amounted to Rs. 54,683. As regards the nature of expenditure, it was stated that she visited her bank quite frequently and since the same was located at a distance of 12 kms. from her house, she had to incur per trip sum of Rs. 100 towards taxi fare.
4. On the basis of the aforesaid arguments, the DC (Appeals) took the view that although the interest on the FDR and saving bank account was credited by the bank suo motu, the assessee was required to visit the bank periodically to ensure that the amount had, in fact, been credited to her bank account. Taking an overall view of the situation, he proceeded to allow a deduction of Rs. 15,000 as against the claim of Rs. 17,643.
5. Being aggrieved with the aforesaid decision, the revenue has come up in appeal before the Tribunal. The learned Departmental Representative supported the order passed by the ITO, whereas the learned counsel for the assessee supported the action of the DC (Appeals). He also invited our attention to the fact that a similar claim for deduction had been allowed by the ITO himself in the preceding assessment year, viz., 1988-89 and in the two subsequent assessment years, viz., 1990-91 and 1991-92 adding in the process that all the aforesaid assessments had been completed under Section 143(1).
6. We have examined the rival submissions and have also perused the material on record to which our attention was invited. The earlier and the subsequent assessments cannot be of much help to the assessee as they have been completed under Section 143(1). The ITO in the assessment year under appeal chose to make necessary enquiries, but being dissatisfied with the replies given proceeded to reject the claim for deduction. He took due note of the fact that the income from interest was credited to the assessee's bank account directly and the assessee had not to incur any expenditure in this connection. He also took note of the absence of documentary evidence in support of the claim. The DC (Appeals), however, allowed the deduction to the extent of Rs. 15,000 on the same set of facts, but on the ground that the assessee had to visit the bank periodically to see whether the amount of interest had been credited to her bank account. In our opinion, the expenditure incurred by the assessee to make visits to the bank for the aforesaid purpose cannot be treated as expenditure which has any nexus with the earning of the income itself. As noted by both the tax authorities, the interest is suo motu credited by the bank to the assessee's account and that is the stage at which the income accrues. In case, the assessee chose to visit the bank to verify the entries in her bank account and for which purpose expenditure to the tune of Rs. 17,643 per annum had to be incurred, then the same, by no stretch of imagination can be treated as an allowable deduction since it has no bearing on the earning of the said income. The provisions of Section 57 of the Income-taxAct, 1961 do not envisage any such deduction. In this view of the matter, we set aside the order passed by the DC (Appeals) and restore that of the Income-tax Officer.
7. In the result, the appeal is allowed.