Income Tax Appellate Tribunal - Mumbai
Sanjiv Kapoor, Mumbai vs Assessee on 16 June, 2006
आयकर अपील य अ धकरण,
`आयकर धकरण मंुबई यायपीठ 'बी' मंुबई
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH, MUMBAI
ी बी.आर
बी आर.
आर म ल, या यक सद य एवं ी राजे , लेखा सद य के सम
BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER, AND
SHRI RAJENDRA, ACCOUNTANT MEMBER
आयकर अपील सं. / ITA no. 4204/Mum./2008
( नधारण वष / Assessment Year : 2003-04)
Mr. Sanjeev M. Kapoor
L/h Late Mahendra Kapoor ....................... अपीलाथ /
301, Shantanu Apartment Appellant
St. Martin Road, Bandra (W)
Mumbai 400 050
बनाम v/s
Income Tax Officer
Ward-11(1)(2), Aayakar Bhavan ................... यथ /
101, M.K. Road, Mumbai 400 020 Respondent
थायी लेखा सं./जीआइआर सं./PAN/GIR no.AHTPK2156R
नधा रती क ओर से / Assessee by : Mr. M. Subramanian
राज व क ओर से / Revenue by : Mr. P.K.B. Menon
सनवाई
ु क तार ख / आदे श घोषणा क तार ख /
Date of Hearing - 27.06.2012 Date of Order - 11.07.2012
आदे श / ORDER
PER B.R. MITTAL, J.M.
The present appeal preferred by the Revenue, is directed against the impugned order 1st March 2011, passed by the learned Commissioner-XX, Mumbai, for assessment year 2008-09.
Mr. Sanjeev M. Kapoor 2
2. Ground no.1, of the appeal is general in nature and do not require any adjudication.
3. In ground no.2 of the appeal, the assessee has disputed the order of the learned Commissioner (Appeals) in disallowing the deduction under section 80RR of the Income Tax Act, 1961 (for short "the Act") amounting to ` 16,74,600.
4. The relevant facts are that the assessee is an individual and is a playback singer. He claimed that on account of services rendered as a singer, he has received remuneration in foreign currency to the equivalent of a sum of ` 56,75,311. The Assessing Officer has stated that two encashment certificates from Wallstreet Finance Ltd. for ` 14,34,600 and ` 2,40,000, were not in Form 10H. Therefore, the Assessing Officer denied the claim under section 80RR, inter-alia, in respect of above two amounts. Being aggrieved, the assessee filed appeal before the first appellate authority.
5. On behalf of the assessee, it was contended that the Reserve Bank of India (RBI) had issued circular by virtue of which the said finance company namely Wallstreet Finance Ltd., had issued the said certificate and, therefore, the Assessing Officer was not justified to deny the claim under section 80RR in respect of the aforesaid two amounts aggregating to ` 16,74,600. The learned Commissioner (Appeals) sought a remand report from the Assessing Officer. The learned Commissioner (Appeals) has stated that the Assessing Officer, in his remand report, stated that one certificate issued by Wallstreet Finance Ltd., was in the name of assessee's son Mr. Rohan Kapoor of ` 24,00,000, and whereas, the other certificate of ` 14,34,600, is in the name of the assessee. He has stated that the Assessing Officer pointed out that as per RBI circular, Form ECF is in place of Form 10H, but the certificate issued by Wallstreet Finance Ltd., was not in such form. In view of the above, the learned Commissioner (Appeals) confirmed the action of the Assessing Officer to disallow deduction under section 80RR, in respect of ` 16,74,600. Hence, the assessee is in further appeal before the Tribunal.
Mr. Sanjeev M. Kapoor 3
6. During the course of hearing, the learned Counsel for the assessee referred to Pages-4 & 5 of the paper book and submitted that Wallstreet Finance Ltd., issued encashment certificate for the remittance of foreign currency to the assessee. However, the learned Counsel for the assessee conceded that one of the certificates i.e., placed at Page-5 of ` 2,40,000, is in the name of assessee's son Mr. Rohan Kapoor. He further referred to Page-6 of the paper book and submitted that the RBI, vide its letter dated 16th June 2006, stated that certificate of encashment of foreign currency issued by FFNCs in Form-ECF and not in Form-10H. He also referred to page-7 of the paper book which is a copy of RBI's letter dated 31st October 1998, addressed to various dealers in foreign exchange / FFMCs / restricted money changers, inter-alia, confirming that encashment of foreign currency notes / travelers cheques, the certificate should be issued in Form no.ECF and not in Form 10H. The learned Counsel for the assessee submitted that Wallstreet Finance Ltd. is a FFMCs and, accordingly, the certificate issued for encashment of foreign currency is in order. Therefore, it is not justified to disallow deduction claimed under section 80RR to the assessee.
7. The learned Departmental Representative relied on the orders of the authorities below and submitted that for deduction under section 80RR, rule prescribe the certificate in Form no.10H. Since the assessee could not furnish the encashment certificate in Form 10H, the assessee could not be allowed deduction under section 80RR of the Act.
8. We have carefully considered the submissions of the learned Representatives of the parties and the orders of the authorities below as also the relevant pages of paper book (supra).
9. We observe that the RBI, vide its letter dated 31st October 1998, copy placed at page-7 of the paper book and again vide letter dated 16th June 2006, copy placed at page-6 of the paper book, clarified that in the case of salaries of shipping crew members, the certificate is to be issued in Form 10H against encashment of foreign currency / travelers chaque but in other cases, the certificate should be issued for encashment of foreign currency notes / travelers cheuqes in Form ECF. We observe that Walstreet Finance Mr. Sanjeev M. Kapoor 4 Ltd. an authorised FFMCs issued certificate of ` 14,34,600, copy placed at Page-4, to the assessee and the said certificate should be accepted as valid to allow deduction to the assessee under section 80RR of the Act. However, the other certificate of ` 2,40,000, copy placed at Page-5 of the paper book, is not in the name of the assessee but is in the name of assessee's son and, therefore, the assessee cannot take benefit for deduction under section 80RR in respect of ` 2,40,000. Hence, we modify the orders of the authorities below by directing that the assessee be entitled for deduction under section 80RR, in respect of ` 14,34,600, and the same should be allowed subject to compliance of conditions of section 80RR of the Act. Hence, ground no.2, taken by the assessee is allowed in part restricting the claim of the assessee for deduction under section 80RR to ` 14,34,600, on the basis of the certificate issued by Wallstreet Finance Ltd.
10. In ground no.3, of the appeal, the assessee has disputed the order of the learned Commissioner (Appeals) in approving the action of the Assessing Officer to disallow interest paid to bank on borrowings.
11. The Assessing Officer has stated that the assessee debited ` 9,63,212.41, as bank interest. The Assessing Officer has stated that the assessee was asked to explain the nexus of interest payment to the income earned. The Assessing Officer, after considering the explanation of the assessee, which is stated by him at pages-4 and 5 of the assessment order, has stated that the assessee made investment in partnership firm namely Siddhi Vinayak Builders. That the share of firm is exempted under section 10(2A) of the Act. He has further stated that the assessee has neither received interest income, remuneration from the firm and dividend from the companies in which the assessee has used the loan for investment. Therefore, the Assessing Officer has disallowed the claim of interest as per the provisions of section 14A of the Act which provides that no deduction shall be allowed in respect of expenditure incurred in relation to income which does not form part of the total income under the Act. The learned Commissioner (Appeals) also confirmed the action of the Assessing Officer after seeking remand report from the Assessing Officer and observed that the assessee has also not given any reply to the remand report, copy of Mr. Sanjeev M. Kapoor 5 which was given to him. Hence, the assessee is in further appeal before the Tribunal.
12. During the course of hearing, the learned Counsel for the assessee could not controvert the above facts, save and except, stating that the matter could be restored to the file of Assessing Officer as was done in the assessment year 2002-03.
13. On the other hand, the learned Departmental Representative submitted that the Assessing Officer as well as the learned Commissioner (Appeals) has disallowed the claim of interest after discussing the facts but in the earlier assessment year, the Tribunal restored the matter to the file of the learned Commissioner (Appeals) as there was no discussion in the orders of the authorities below. The learned Counsel for the assessee could not controvert the above submissions of the learned Departmental Representative.
14. We have perused the order of the Tribunal for assessment year 2002- 03 in ITA no.2942/Mum./2007, order dated 13th February 2008, copy placed at Pages-15 to 17 of the paper book found substance in the submissions of the learned Departmental Representative. Moreover, we observe that the learned Commissioner (Appeals) also sought remand report on the above issue in the assessment year under consideration and gave a copy to the assessee but no reply was filed by the assessee. Considering the facts of the case, and the reasons given by the authorities below, we do not find any infirmity in the order of the learned Commissioner (Appeals) to confirm the action of the Assessing Officer in the absence of any documents placed on record. Hence, we uphold the order of the learned Commissioner (Appeals) to disallow the interest by rejecting ground no.3, of the appeal taken by the assessee.
15. In ground no.4, of the appeal, the assessee has disputed the order of the learned Commissioner (Appeals) in confirming the addition of ` 2,00,000, on account of low withdrawal of house hold expenses.
Mr. Sanjeev M. Kapoor 6
16. We have perused the orders of the authorities below. We observe that the Assessing Officer has stated that the assessee has shown no withdrawal for house hold expenses and claimed that his wife's income from AOP is used for house hold expenses. During the course of hearing, the learned Counsel for the assessee referred to Page-11 of the paper book stating that his wife has shown withdrawal from her account and the same was used for household expenses. Further, on perusal of the said statement placed at Page-11 of the paper book, we observe that there is a withdrawal by way of cheque and no details have been given as to how much amount was contributed by assessee's wife for household expenses. Further, there is no dispute to the fact that there are no household expenses shown by the assessee in Profit & Loss account filed by him. Considering the facts and circumstances of the case, we do not find any reason to interfere with the order of the learned Commissioner (Appeals) and, accordingly, reject ground no.4, of the appeal taken by the assessee.
17. In grounds no.5 to 7, of the appeal, the assessee has disputed levy of interest charged under section 234A, 234B and 234C of the Act.
18. Since charging of interest under the above sections is consequential, no specific adjudication is required.
19. प रणामतः नधा रती क अपील आं शक वीकत ृ क जाती है ।
11. In the result, assessee's appeal is allowed in part.
th आदे श क धोषणा खले ु यायालय म दनांकः 11 July 2012 को क गई ।
Order pronounced in the open Court on 11th July 2012 Sd/- Sd/-
राजे बी.आर
बी आर.
आर म ल
लेखा सद य या यक सद य
RAJENDRA B.R. MITTAL
ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED: 11th July 2012
Mr. Sanjeev M. Kapoor
7
Copy to:
(1) The Assessee;
(2) The Revenue;
(3) The CIT(A), Mumbai, concerned;
(4) The CIT, Mumbai City concerned;
(5) The DR, "B" Bench, ITAT, Mumbai.
स या पत त / True Copy
आदे शानसार
ु / By Order
Pradeep J. Chowdhury
Sr. Private Secretary
उप / सहायक पंजीकार (Dy./Asstt. Registrar)
आयकर अपील य अ धकरण,
धकरण मंुबई / ITAT, Mumbai