RADHIKA MOHAN KAMAT, MUMBAI v. ASST CIT 15(2), MUMBAI

ITA 6623/MUM/2013 | 2009-2010
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 662319914 RSA 2013
Assessee PAN ALQPK4411L
Bench Mumbai
Appeal Number ITA 6623/MUM/2013
Duration Of Justice 2 year(s) 10 month(s) 17 day(s)
Appellant RADHIKA MOHAN KAMAT, MUMBAI
Respondent ASST CIT 15(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Bench Allotted D
Tribunal Order Date 30-09-2016
Date Of Final Hearing 30-06-2016
Next Hearing Date 30-06-2016
Assessment Year 2009-2010
Appeal Filed On 12-11-2013
Judgment Text
1 I.T.A. NO.6623/MUM/2013 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.6623/MUM/2013 (ASSESSMENT YEAR : 2009-10) RADHIKA MOHAN KAMAT AASTHA 34 SARAS BAUG V.N. PURAV MARG SION-TROMBAY ROAD DEONAR MUMBAI-88 VS ACIT 15(2) MUMBAI PAN : ALQPK4411L (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ANIL J SATHE RESPONDENT BY SHRI B.S. BIST (SR DR) DATE OF HEARING : 28-09-2016 DATE OF PRONOUNCEMENT : 30-09-2016 O R D E R PER ASHWANI TANEJA AM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-26 MUMBAI [H EREINAFTER CALLED CIT(A)] DT 14-08-2013 PASSED AGAINST THE ASSESSMENT ORDER U /S 1433) DATED 11-11- 2011 FOR A.Y. 2009-10 ON THE FOLLOWING GROUNDS: 1 THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MA DE BY THE LEARNED ASSESSING OFFICER OF RS.15 00 000/- REC EIVED FROM M/S ALMA MOTORS PVT. LTD. 2 I.T.A. NO.6623/MUM/2013 2. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THE S UM RECEIVED BY THE APPELLANT IS ACTUALLY IN THE NATURE OF REIMB URSEMENT OF EXPENDITURE I.E. IT IS AN EDUCATIONAL ASSISTANCE PR OVIDED TO THE APPELLANT DIRECTOR AND HENCE NOT CHARGEABLE AS INCO ME IN HER HANDS 3. THE LEARNED CIT-(A) HAS DID NOT CONSIDER THE FACTUA L MATRIX OF THE CASE AND THEREBY ERRED IN COMING TO A CONCLUSIO N THAT THE APPELLANT DIRECTOR HAS RECEIVED BENEFIT FROM THE CO MPANY 4. THE LEARNED CIT-(A) ERRED IN NOT APPRECIATING THE R ATIO OF VARIOUS JUDICIAL PRONOUNCEMENTS PLACED ON RECORD BE FORE HIM 5. THE LD. CIT-(A) FAILED TO APPRECIATE THAT THE SAID RECEIPT BY THE DIRECTOR DOES NOT SATISFY THE TESTS OF INCOME A ND CONSEQUENTLY CANNOT BE BROUGHT TO TAX UNDER THE RES IDUARY HEAD INCOME FROM OTHER SOURCES MERELY BECAUSE IT FA ILS THE TEST UNDER OTHER HEADS. 6. THE LEARNED CIT-(A) ERRED IN RELYING ON THE DECISIO N GIVEN IN LADY NAVAJBAI R J TATA 15 ITR 8 THE FACTS OF WHICH ARE DISTINGUISHABLE FROM THE CASE OF THE APPELLANT. 7. IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE ABO VE GROUNDS THE LEARNED CIT-(A) HAS ERRED IN LAW IN NOT APPRECI ATING THE FACT THAT THE SAID AMOUNT OF RS.15 LACS BEING TAXED AS INCOME IN THE HANDS OF THE COMPANY - M/S ALMA MOTORS PVT. LTD. AND THE SAID DISALLOWANCE HAVING BECOME FINAL THE SAID ADDITION TO THE INCOME OF APPELLANT WILL AMOUNT TO DOUBLE TAXATION. 2. THE SOLITARY ISSUE RAISED IN THIS APPEAL IS REGARDI NG THE TAXABILITY OF A SUM OF RS.15 LAKHS IN THE HANDS OF THE ASSESSEE RECEIVE D BY HER FROM THE COMPANY NAMELY M/S ALMA MOTORS PVT LTD IN WHICH SHE WAS A D IRECTOR BEING THE AMOUNT REIMBURSED BY THE COMPANY ON ACCOUNT OF EXPE NSES INCURRED BY HER FOR PURSUING HIGHER STUDIES IN LAW IN LONDON. 3. THE BRIEF BACKGROUND AND FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE AO THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE RECEIVED A SUM OF RS.15 LAKHS FROM THE AFORESAID 3 I.T.A. NO.6623/MUM/2013 COMPANY IN WHICH ASSESSEE WAS A DIRECTOR ON ACCOU NT OF REIMBURSEMENT OF THE EXPENDITURE INCURRED BY THE ASSESSEE ON HER HIG HER STUDIES ABROAD IN LONDON. THE AO TREATED THIS AMOUNT AS TAXABLE IN T HE HANDS OF THE ASSESSEE U/S 2(24)(IV) R.W.S. 56 OF THE ACT. BEING AGGRIEVE D THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND FILED DETAILED SUBMISSION S ALONG WITH EVIDENCES THAT THE IMPUGNED AMOUNT COULD NOT BE TAXED AS INCOME IN THE HANDS OF THE ASSESSEE UNDER ANY PROVISIONS OF THE ACT. BUT LD. CIT(A) WAS NOT SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE AND THEREFORE HE ENDORSED THE ORDER OF THE AO AND CONFIRMED THE ADDITION MADE BY THE AO BY DIS MISSING THE APPEAL OF THE ASSESSEE. BEING AGGRIEVED THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. 3. DURING THE COURSE OF HEARING BEFORE US THE LD. COU NSEL VEHEMENTLY SUBMITTED THAT ORDER OF LD. CIT(A) IS HIGHLY UNFAIR AND UNJUSTIFIED IN AS MUCH AS THE ASSESSEE HAD REQUESTED FOR ADMISSION OF FEW AD DITIONAL EVIDENCES SHOWING THAT THE ENTIRE AMOUNT HAS BEEN REFUNDED BY THE ASS ESSEE TO THE SAID COMPANY AND THEREFORE IT CANNOT BED SAID THAT ANY BENEFIT WAS RECEIVED BY THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE DI SALLOWANCE WAS MADE BY THE AO OF THE SAID COMPANY WHILE PASSING ASSESSMENT ORD ER OF THE SAID COMPANY BY TREATING THE EXPENSES INCURRED AS INCURRED FOR N ON-BUSINESS PURPOSES. THE ASSESSMENT ORDER OF THE SAID COMPANY HAS ATTAINED F INALITY AS THE SAID COMPANY HAS WITHDRAWN APPEAL FILED AGAINST THE SAID ASSESSMENT ORDER BEFORE THE TRIBUNAL. THUS IN THE GIVEN FACTS OF THE CASE NO PREJUDICE IS CAUSED TO THE INCOME TAX DEPARTMENT AS THERE IS NO REVENUE LEAKAG E. HE SUBMITTED BEFORE US REQUISITE EVIDENCES INDICATING REFUND OF THE ENT IRE MONEY BY THE ASSESSEE TO THE SAID COMPANY AGGREGATING TO RS.1 07 10 000/-. HE ALSO SUBMITTED COPY OF BOARDS RESOLUTION INDICATING THAT WHEN THE AMOUNT WAS DISBURSED TO THE ASSESSEE BY THE COMPANY THE INTENTION WAS THAT THE ASSESSEE SHALL WORK IN THE 4 I.T.A. NO.6623/MUM/2013 INTEREST OF THE COMPANY AFTER COMPLETING HER STUDIE S. THEREFORE IT WAS NOT AN OPEN OFFER; THE AMOUNT WAS GIVEN IN THE FORM OF A L IABILITY WHICH WAS TO BE DISCHARGED BY THE ASSESSEE BY SERVING THE COMPANY O N COMPLETION OF HER STUDIES ABROAD. THUS THE AMOUNT WAS GIVEN AGAINST A CONSIDERATION. IN ADDITION TO THAT IT WAS ALSO CONTENDED BY THE LD. C OUNSEL THAT THE IMPUGNED AMOUNT IS NOT HIT BY THE PROVISIONS OF SECTION 2(24 )(IV) SINCE THE PAYMENT HAS BEEN MADE BY THE COMPANY IN CASH TO THE ASSESSEE W HEREAS TO BE COVERED UNDER THE SAID PROVISIONS THE PAYMENT SHOULD HAVE BEEN MADE DIRECTLY TO THIRD PARTY BY THE COMPANY. IN SUPPORT OF THIS PROP OSITION HE RELIED UPON THE JUDGMENTS OF HONBLE DELHI HIGH COURT IN THE CASE O F KRISHAN BANS BAHADUR VS CIT 316 ITR 411 (DEL) AND HONBLE SUPREME COURT IN THE CASE OF CIT VS MAFATLAL GANGABHAI & CO PVT LTD 219 ITR 644 (SC). IT WAS PL EADED BY HIM THAT FULL JUSTICE HAS NOT BEEN GIVEN TO THIS CASE BY LD. CIT( A). NEITHER THE LAW HAS BEEN PROPERLY APPRECIATED NOR HAS IT BEEN APPLIED CORREC TLY AND THEREFORE THE ADDITION DESERVES TO BE DELETED. 4. PER CONTRA THE LD. DR VEHEMENTLY OPPOSED THE SUBMI SSIONS OF THE ASSESSEE AND SUBMITTED THAT WHEN THE AMOUNT WAS GIV EN IT WAS IN THE NATURE OF BENEFIT AND THEREFORE IT HAS BEEN RIGHTLY BROU GHT TO TAX BY THE AO. BUT LD. DR DID NOT NEGATE OR CONTROVERT THE EVIDENCES SUBMI TTED BY THE ASSESSEE PROVING REFUND OF ENTIRE MONEY BY THE ASSESSEE TO T HE SAID COMPANY AS WELL AS FACTUM OF THE RESOLUTION HAVING BEEN PASSED BY THE SAID COMPANY AT THE TIME OF REIMBURSEMENT OF EXPENDITURE BY THE SAID COMPANY TO THE ASSESSEE. 5. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHOR ITIES EVIDENCES BROUGHT BEFORE US AND SUBMISSIONS MADE BY BOTH THE SIDES. IN THIS CASE IT HAS BEEN VEHEMENTLY CONTENDED BY THE ASSESSEE THAT IN F ACT THE ENTIRE MONEY HAS BEEN REFUNDED BY THE ASSESSEE TO THE SAID COMPANY. THE ASSESSEE TRIED TO 5 I.T.A. NO.6623/MUM/2013 FURNISH THE EVIDENCES BEFORE THE LD. CIT(A) WHICH W ERE NOT CONSIDERED BY HIM. THE LD. COUNSEL ALSO PLACED ON RECORD BEFORE US TH E COPY OF THE BOARD RESOLUTION INDICATING THAT WHEN THE AMOUNT WAS GIVE N TO THE ASSESSEE THERE WAS AN UNDERSTANDING THAT THE ASSESSEE SHALL SERVE THE COMPANY AFTER COMPLETING HER STUDIES. IT IS NOTED BY US THAT THE ASSESSEE HAS TREATED THIS AMOUNT AS LIABILITY IN THE SENSE THAT AFTER COMPLET ING THE STUDIES SHE WAS COMMITTED TO WORK WITH THE COMPANY. IT IS EVIDENT FROM THE CONDUCT OF THE ASSESSEE WHEN SHE HAS REFUNDED THE ENTIRE MONEY TO THE SAID COMPANY AGGREGATING TO RS.1 07 10 000/-. IN OUR OPINION T HESE FACTS HAVE MATERIAL BEARING UPON THE ISSUE IN HAND. THEREFORE THESE M UST BE CONSIDERED BY THE LOWER AUTHORITIES BEFORE TAKING ANY DECISION IN THI S REGARD. LD. COUNSEL HAS VEHEMENTLY CONTENDED THAT THERE IS NO REVENUE LEAKA GE SINCE ENTIRE MONEY RECEIVED BY THE ASSESSEE STANDS REPAID TO THE SAID COMPANY. FURTHER THE DISALLOWANCE MADE IN THE HANDS OF THE COMPANY HAS A TTAINED FINALITY. EVIDENCES IN THIS REGARD WERE NOT AVAILABLE BEFORE LD. CIT(A). THE ORDER OF WITHDRAWAL OF APPEAL BY THE SAID COMPANY FROM THE T RIBUNAL WAS NOT READILY AVAILABLE WITH THE LD. COUNSEL AND THEREFORE IT CO ULD NOT BE PLACED BEFORE US. UNDER THESE CIRCUMSTANCES WE FIND IT PROPER TO SEN D THIS ISSUE BACK TO THE FILE OF THE AO WITH DIRECTION TO GIVE OPPORTUNITY OF HEA RING TO THE ASSESSEE TO PLACE ALL THESE DETAILS AND EVIDENCES AS MAY BE CONSIDERE D APPROPRIATE AS PER LAW AND FACTS BEFORE THE AO. THE AO SHALL TAKE INTO AC COUNT ALL THE DOCUMENTARY EVIDENCES AND SUBMISSIONS AS MAY BE PLACED ON RECOR D BY THE ASSESSEE AND AFTER TAKING INTO ACCOUNT ALL THE FACETS OF THE ISS UE AND THE JUDGMENTS THAT HAVE BEEN RELIED UPON BY THE LD. COUNSEL BEFORE US OR AS MAY BE PLACED BEFORE THE AO BEFORE DECIDING THIS ISSUE AFRESH. WITH THE SE DIRECTIONS THIS ISSUE IS SENT BACK TO THE FILE OF THE AO. 6 I.T.A. NO.6623/MUM/2013 6. AS A RESULT THE APPEAL MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON THIS _30 TH DAY OF SEPTEMBER 2016. SD/- SD/- (SANJAY GARG) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT: 30 TH SEPTEMBER 2016 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE D-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT MUMBAI BENCHES