Income Tax Appellate Tribunal - Kolkata
Supriya Gooptu, Kolkata vs Assessee
आयकर अपीलीय अधीकरण, Ûयायपीठ - " SMC ", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH : KOLKATA
(सम¢)Before ौी डȣ.
डȣ. के. ×यागी,
×यागी, Ûयायीक सदःय,)
[Before Hon'ble Sri D. K. Tyagi, JM)
आयकर अपील संÉया / I.T.A No. 2101/Kol/2009
िनधॉरण वषॅ/Assessment Year : 2002-03
Supriya Gooptu -Vs- Income-tax Officer, Wd-33(1), Kolkata.
(PA No. AEDPG 9981 R)
(अपीलाथȸ/APPELLANT ) (ू×यथȸ/RESPONDENT)
For the Appellant : Sri M. K. Dutta
For the Respondent Sri P. Kolhe
आदे श/ORDER
This appeal has been preferred by the assessee against the order of the Ld. CIT(A), Kolkata dated 22.10.2009 for assessment year 2002-03 on the following grounds :
"1. That on the facts and circumstances of the case as well as on law, the Ld. CIT(A)0xx, Kolkata, has erred in holding that the appellant is not entitled to the benefits u/s. 80U of the Income Tax Act.
2. That on the facts and circumstances of the case as well as on law, the Ld. CIT(A)-xx, Kolkata has erred in confirming the disallowance of the claim of the assessee for Rs.28,813/- towards legal expenses.
3. That on law as well as on the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the inclusion of an amount of Rs.32,184/- in the annual value in respect of the first floor flat which was sold.
4. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs.8000/- paid towards Accountant's Remuneration.
5. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs.6771/- incurred by the assessee towards lift maintenance charges.
6. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the disallowance of Rs.3465/- on account of fire insurance premium."
2. Ground No. 1 relates to sustaining the disallowance of the claim of deduction u/s. 80U. Facts of the case are that the assessee claimed deduction of Rs.40,000/- under the provisions of section 80U. The Assessing Officer noted that the assessee suffers from a heart disease, which is not a permanent physical disability within the meaning of section 2 80U read with Rule 11D. He also noted that the assessee failed to produce the required certificate as prescribed u/s. 80U. Hence, the claim of deduction of Rs.40,000/- u/s. 80U was disallowed by the Assessing Officer. In appeal, the Ld. CIT(A) confirmed this action of the Assessing Officer. Being further aggrieved, the assessee is now in appeal before us.
3. At the time of hearing before us, the Ld. Counsel for the assessee while reiterating his same submissions as submitted before the Ld. CIT(A) further submitted that the assessee is a businessmen and had claimed deduction u/s. 80U of the Income Tax Act, 1961 on the ground that he is suffering from Coronary heart disease resulting in permanent disability which had substantially affected his capacity to engage himself gainfully. To that effect, a certificate from the Asstt. Prof. Department of Cardiology, SSKM Hospital, Kolkata that the assessee is suffering from permanent physical disability, was also produced as required under the proviso to section 80U as it stood at the relevant point of time. A copy of the said medical certificate is also annexed with the paper book pages 3 to 5. He also contended that the assessee in fact had undergone BY-pass surgery in the assessment year 1996-97 and by filing the said certificate from the expert medical officer in original, has been claiming the benefits of section 80U since the very first year i.e. assessment year 1996-97 itself which have also been allowed by the Income Tax Department in all these years until it was reversed by the Assessing Officer in the year under appeal. The contention of the Ld. CIT (Appeals) is that the claim of the assessee is not covered Rule l1D, whereas the contention of the assessee is that while considering the question of allowing deduction u/s. 80U of the year, what is to be looked into is whether the assessee suffers from a permanent physical disability which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation. To this effect, the assessee relied on a judgment of the Hon'ble Gujrat Court in CIT v. Bhagabat Prasad P. Parikh (1999) 239 ITR 645. He lastly concluded that the addition so made by the Assessing Officer and sustained by the Ld. CIT(A) may be deleted.
4. On the other hand, the Ld. DR relied on the order of the lower authorities.
35. After hearing the rival submissions, carefully perusing the material available on record and the case law referred by the Ld. Counsel, cited supra, I find that as per Rule 11D, permanent physical disabilities for the purposes of deduction u/s. 80U, -
i) permanent physical disability shall be regarded as a permanent physical disability if it falls in any one of the categories specified below, namely -
(a) permanent physical disability of more than 50 per cent in one limb; or
(b) permanent physical disability of more than 60 per cent in two or more limbs; or
(c) permanent deafness with hearing impairment of 71 decibels and above;
or
(d) permanent and total loss of voice.
ii) mental retardation shall be regarded as a mental retardation if intelligence
quotient is less than 50 on a test with a mean of 100 and a standard deviation of 15 such as the Wechsle scale;
iii) blindness shall be regarded as a permanent physical disability, if it is incurable and falls in any one of the categories specified below, namely -
All with corrections
Better eye Worse eye
(a) 6/60 - 4/60 3/60 to Nil
Or
Field of vision
110-20
Since, in this case, as per certificate of Asstt. Prof. Department of Cardiology, SSKM Hospital, Kolkata, the assessee was suffering from Coronary heart disease, which is not categorized under the above categories, 80U deduction cannot be claimed. The decision of Hon'ble Gujarat High Court (supra) is not applicable to the facts of this case as Rule 11D was only inserted by the IT (Fourth Amendment) Rules, 1985, w.e.f. 1.4.1985 and later on substituted by the I.T (Third Amdt.) Rules, 1992 w.r.e.f 1.4.1990/1.4.1992. While the Hon'ble High Court was deciding the case pertaining to assessment year 1977-78 when 80U deduction was not subject to any categorization of permanent physical disability as has been done by Rule 11D w.e.f. 1.4.1985. Hence, I do not find any infirmity in the order of the Ld. CIT(A) in disallowing the claim of the assessee and the same is hereby upheld. This ground of appeal of the assessee is dismissed.
46. Ground No. 2 relates to confirming the disallowance of Rs.28,813/- towards legal expenses. The Assessing Officer disallowed the claim of the assessee towards legal expenses on the ground that it has no nexus with the earning of the income. Before the First Appellate Authority, the assessee submitted that the assessee is dealing with large number of tenants and is under legal obligation to ensure proper upkeep and maintenance of the house properties. The expenses are all genuine and have been incurred in the normal course. In the past also, such expenses have been allowed by the Department. He also contended that the legal expenses were incurred in respect of ejection suits filed against two tenants, therefore, the Assessing Officer was not justified in presuming that it has no nexus with the earning of income. Considering the arguments of the assessee, the Ld. CIT(A) observed that the assessee made payments to the Solicitors in connection with ejection suits filed against two tenants. The expenditure is not directly related to the earning of income. He was, therefore, of the opinion that the Assessing Officer was justified in holding that it has no nexus with the earning of income. Hence, he confirmed the action of the Assessing Officer towards legal expenses. Aggrieved by the said order, now the assessee is in appeal before us.
7. At the time of hearing before us, the Ld. Counsel for the assessee submitted that the Ld. CIT(A) has confirmed the disallowance made by the Assessing Officer of an amount of Rs.28,813/- incurred towards legal expenses being payment made to Solicitors in respect of cost of two ejection suits filed against the tenants of which the assessee's share is 1/3rd i.e. Rs.9,604/-. The contention of the Assessing Officer that there was no nexus between the expenses and the earning of the income is not borne by the facts of the case. In fact, the Ld. CIT(A) has not shown any specific reasons in support of his confirmation of the disallowance by the Assessing Officer. He also filed copies of the bills of Solicitors, which is available at pages 6 to 13 of the paper book. He lastly concluded that the addition so sustained by the Ld. CIT(A) may be deleted.
8. On the other hand, the Ld. DR relied on the orders of the lower authorities.
9. After hearing the rival submissions and perusing the material available on record, I find that these expenses were incurred by the assessee towards payment made to Solicitor in respect of two Ejection Suit filed against the tenants of which the assessee's 5 share is 1/3rd i.e. Rs.9,604/-. Since the payment has been confirmed by the Solicitors, hence not in dispute and the amount involved is very meager, the addition so made is hereby deleted.
10. Ground No. 3 relates to confirmation of the action of the Assessing Officer for inclusion of an amount of Rs.32,184/- in the annual value in respect of the first floor flat. At the time of hearing before me, the Ld. Counsel for the assessee submitted that the annual value of his house property situated at 7A/1B, Middleton Street, Kolkata-71 included an amount of Rs.32,184/- in respect of a flat in the first floor which was sold in the year 1990. It was, therefore, submitted that an amount of Rs.32,184/- should be excluded from the annual value. The documents in respect of the sale of the property were produced before the Assessing Officer as also before the Ld. CIT(A). In fact copies of several documents in support of the disposal of the property were filed before the Assessing Officer and the Ld. CIT(A) and it is not a statement of fact as recorded by the Ld. CIT(A) in his order that nothing was produced before him in support of his contention. Copies of documents in support of disposal of the property in the year 1990 are at pages 14 to 19 of the paper book. He, therefore, urged before the bench to give deduction of an amount of Rs.32,184/- in the annual value in respect of the first floor flat which was sold.
11. On the other hand, the Ld. DR relied on the orders of the lower authorities.
12. After hearing the rival submissions and carefully perusing the material available on record, I find force in the submission of the Ld. Counsel for the assessee that the documents in respect of the sale of the property were produced before the Assessing Officer as well as the Ld. CIT(A), which are also available at paper book pages 14 to
17. The Ld. CIT(A) without considering the same held that nothing was produced before him in support of the disposal of the property. In view of this, I am of the considered opinion that the amount of Rs.32,184/- in respect of a flat in the first floor which was sold in the year 1990 should be excluded from the annual value. Therefore, this ground of appeal of the assessee is allowed.
613. Ground Nos. 4, 5 and 6 are relating to sustenance of disallowance of Rs.8000/-, Rs.6771/- and Rs.3465/- on account of Accountant's remuneration, lift maintenance charges and insurance premium respectively. At the time of hearing before us, no substantial arguments have been advanced by the Ld. Counsel for the assessee, therefore, I feel no need to interfere with the order of the Ld. CIT(A) and the same is hereby upheld. These grounds of appeal of the assessee are, therefore, dismissed.
14. In the result, the appeal of the assessee is allowed in part.
15. Order is pronounced in the open court on 24.9.10 Sd/-
डȣ. के. ×यागी, Ûयायीक सदःय (D. K. Tyagi) Judicial Member (तारȣख) तारȣख) Dated : 24th September, 2010 वǐरƵ िनǔज सिचव Jd.(Sr.P.S.) आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - Sri Supriya Gooptu, 71/1B, Middleton Street, Kolkata-71.
2 ू×यथȸ/ Respondent, ITO, Wd-33(1), Kolkata. .
3. आयकर किमशनर/The CIT,
4. आयकर किमशनर (अपील)/The CIT(A), Kolkata
5. वभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, उप पंजीकार/Deputy Registrar.