Income Tax Appellate Tribunal - Indore
Ashwin Patangiya, Indore vs Assessee on 26 July, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL,
INDORE BENCH, INDORE
BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARMA, A.M.
PAN NO. : ACAPP3544J
I.T.A.No. 302/Ind/2012.
A.Y. : 2007-08
Shri Ashwin Patangiya, ACIT,
185,Vindhyachal Nagar, vs 4(1),
Indore Indore.
Appellant Respondent
Appellant by : Shri S. S. Deshpande and Shri R.
P. Mandovra, CAs
Respondent by : Shri R. A. Verma, Sr. DR
Date of Hearing : 26.07.2012
Date of : 01.08.2012
pronouncement
ORDER
PER R. C. SHARMA, A.M.
This is an appeal filed by the assessee against the order of CIT(A) dated 5.12.2010 for the assessment year 2007-08 wherein following grounds have been taken by the assessee :-
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1. That the order of the ld. CIT(A) is bad, both in law & on facts.
2. That on the facts, in law & in the circumstances of the case, the Assessing Officer has erred in disallowing the rebate of STT u/s 88E of the Income-tax Act, 1961. The disallowance of rebate of STT by the Assessing Officer and as sustained by the ld.CIT(A) is arbitrary, unwarranted on facts and bad in law.
3. That on the facts, in law & and in the circumstances of the case, the Assessing Officer has erred in assessing the income of the appellant u/s 23(4) by Rs. 1,24,800/- by estimating annual value of house at Shikshak Nagar. The enhancement as made by CIT(A) is arbitrary & excessive.
4. That on the facts, in law and in the circumstances of the case, the Assessing Officer has erred in assessing Rs. 3,54,000/- on estimation of house 2
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hold expenses. The enhancement as made by CIT(A) is arbitrary, unwarranted on facts and bad in law.
2. Rival contentions have been heard and records perused. The assessee has filed its return of income in form ITR-4 electronically on 28.2.2007. On page 9, Part-B, Item No.2 - Rebate u/s 88E was shown and claimed at Rs. 7,96,923/-. The return was processed and intimation u/s 143(1)(i) was issued, wherein rebate claimed u/s 88E was not considered and allowed while calculating the net tax amount payable by the assessee. The Assessing Officer observed that the assessee needed to claim the STT via Form 10DB . However, assessee submitted the Form 10DB but there has been no claim of STT on account of securities transactions entered into in the course of his business as column no. 5 of the form 10DB is Nil (nothing is mentioned). Column 5 is for the value of the transactions entered into in the course of business by the assessee. Therefore, it was held by Assessing Officer that the assessee does not have any right to claim rebate u/s 88E.
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3. By the impugned order, the ld. CIT(A) confirmed the action of the Assessing Officer.
4. We have considered the rival submissions and have gone through the orders of the authorities below and found from record that there is no dispute to the fact that the assessee had actually paid STT and the same was claimed in the return filed electronically. However, in the intimation received u/s 143(1)(i), the assessee found that rebate u/s 88E was not considered. Subsequently, case was fixed for scrutiny and the assessment framed u/s 143(3), the Assessing Officer observed that the assessee had submitted form 10B(b), there was no claim of STT as Column No.5 of Form No.10DB is Nil. Thus, by pointing out clerical/procedural mistake, the Assessing Officer has disallowed the claim. We found that mistake was corrected during assessment proceedings itself and when the fact of STT having actually paid on security transaction entered by the assessee and income from which has been considered as a business income, there does not appear any valid reason for disallowing the claim of STT out of the total income tax worked out on assessee's income. 4
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Accordingly, the Assessing Officer is directed to re-verify the actual payment of STT by assessee and to allow the claim of STT of Rs. 7,96,923/-, if he finds that STT was paid in respect of security transactions income from which was assessed as business income. We direct accordingly.
5. During the course of appellate proceedings, the CIT(A) also enhanced the assessment by including income from house property and also addition on account of low house hold withdrawals. In respect of one of the flats, which was occupied by the assessee's father and brothers, the CIT(A) found that annual letting value as per Municipal Valuation is Rs. 32,400/-. During this year, no rent was paid by the father. The ld. CIT(A) further observed that from 2008-09 onwards father of the assessee was paying rent of Rs. 60,000/- per annum. The CIT(A) calculated the rent arbitrarily by estimating Rs. 5/- per sq.ft., which comes to Rs. 1,24,800/- for whole of the years. Accordingly, addition was made by the ld.CIT(A). We do not find any justification for the hypothetical value adopted by the ld.CIT(A). In sofar as the assessee was not in receipt of any rent and the flat was given to father and 5
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brother of the assessee, the annual letting value as per municipal valuation is to be taken at Rs. 32,400/-. Accordingly, we direct the Assessing Officer to take the annual letting value of house property at Rs. 32,400/- and accordingly, recompute the income from house property.
6. The CIT(A) also found that the assessee had shown low withdrawals on account of house hold expenses after calling various details he estimated house hold expenditure at Rs. 40,000/- per month and after deducting actual withdrawal of Rs. 1,26,060/-, addition of Rs. 3,54,000/- was made by the ld.CIT(A).
7. It was contended by the ld. Authorized Representative that CIT(A) has exceeded its power and since no addition was made nor any incriminating material was there, the CIT(A) has made an unwanted addition, which was not called for.
8. We have considered the rival submissions and found from record that the CIT(A) has called the various details of expenditure and thereafter made estimation of over all house hold expenditure at Rs. 40,000/- per month. After considering the status of assessee and the expenditure necessarily 6
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incurred on account of house hold, we modify the order of CIT(A) and direct the Assessing Officer to recompute the amount of addition by taking monthly expenditure at Rs. 20,000/- per month in place of Rs. 40,000/- as estimated by the ld.CIT(A). We direct accordingly.
9. In the result, the appeal of the assessee is allowed in part in terms indicated hereinabove.
This order has been pronounced in the open court on 1st August, 2012.
sd/- sd/-
(JOGINDER SINGH) (R. C. SHARMA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated :1st August, 2012.
CPU*
2627.1.8
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