Binu Nair, C/o Raj Kumar & Associates, 4435/7, Ansari Road, Darya Ganj, New Delhi. Vs. Income-tax Officer, CA Ward 48(2), New Delhi.
September, 10th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "SMC" NEW DELHI
BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER
ITA no. 529/Del/2014
Asstt. Yrs: 2009-10
Binu Nair, Vs. Income-tax Officer,
C/o Raj Kumar & Associates, CA Ward 48(2), New Delhi.
4435/7, Ansari Road, Darya Ganj,
PAN: AAIPN 4744 L
( Appellant ) (Respondent)
Appellant by : Shri Raj Kumar Gupta FCA &
Shri Sumit Goel CA
Respondent by : Shri S.K. Jain Addl. Commissioner
Date of hearing : 23/07/2015.
Date of order : 09/09/2015.
PER S.V. MEHROTRA, A.M..:
This appeal, preferred by the assessee, is directed against the order of ld.
CIT(A)-XXX, New Delhi dated 30-10-2013 passed in appeal no. 3228/11-12,
relating to A.Y. 2009-10.
2. Brief facts of the case are that the assessee, in the relevant assessment year,
derived income from salary. He had filed its return of income declaring total
Binu Nair Vs. ITO
income of Rs. 9,38,749/-. The AO noticed that assessee had claimed HRA
amounting to Rs. 3,80,856/-. He noticed that the assessee had also shown the self
occupied property at address 1-D, Pocket B, SFS Flats, Outer Ring Road, New
Delhi-110018 in his income tax return. However, as per the certificate of interest of
HDFC Bank , the assessee's self occupied property was M-139, Ashiana Utsav
Bhiwadi-301019, for which he had taken loan and claiming deduction u/s 24(b) of
Rs. 1,50,000/-. The AO, after examining the bank statement noted that though
assessee had claimed of having made the payment of rent @ Rs. 32,000/- per
month, but there was no sufficient cash withdrawals and no such entry i.e. cash/
cheque in respect of rent paid by the assessee. He, therefore, disallowed the
assessee's claim of HRA and made addition of Rs. 3,80,856/-.
3. Ld. CIT(A) confirmed the addition, inter alia, observing that total cash
withdrawal of the assessee was Rs. 3,82,000/- out of which assessee claimed that
Rs. 3,80,856/- was paid towards HRA and there was no regular withdrawal of cash
from bank, therefore, explanation of the assessee was not acceptable, inter alia,
observing that if all the cash withdrawals were given to the land-lord, then how
3.1. Ld. counsel for the assessee has filed a summary of withdrawals/ house hold
expenses. Ld. counsel further submitted that assessee paid rent of Rs. 3,84,000/-
and claimed HRA at Rs. 3,80,856/- for rented property no. 1-D, Pocket B, SFS
Flats, Outer Ring Road, New Delhi-110018. He has filed the copy of rent
agreement dated 11-2-2011 in which it is stated that the tenancy commenced from
1-4-2008 for a period of 5 years. He further pointed out that the amount was paid
in cash as the owner was suffering from Parkinson disease and, therefore, was not
Binu Nair Vs. ITO
competent for writing anything and for operating bank account. The land-lord
ultimately died on 22-8-2009. Ld. counsel submitted that there is no dispute that
house rent was paid on which assessee was eligible for HRA deduction. He pointed
out that the only reason for disallowance was insufficient cash withdrawals from
bank for payment of rent and for house-hold expenses. In this regard ld. counsel
referred to the summary of bank withdrawals/ house-hold expenses, contained at
page 1 of the PB and pointed out that the total cash withdrawals were Rs. 3,82,100
and house-hold expenses Rs. 4,48,128/-, which met the car insurance, credit card
payment, LIC premium payment, phone bills, PPF account, school admission fee,
parents a/c/ wife account. He further submitted that, in any view of the matter, on
the basis of insufficient cash withdrawal, HRA could not be disallowed.
4. I have heard the submissions of both the parties. I find considerable merit in
the argument of ld. counsel for the assessee that once AO did not dispute the
payment of HRA, then the deduction on account of payment of HRA could not be
denied against the income from salary. I further find that the assessee had
sufficiently explained the reasons for payment of rent in cash and also
demonstrated that there were cash withdrawals which were almost sufficient to
meet the rent payment requirement. Further, other house-hold expenses were easily
met as is evident from the chart submitted by assessee. Further, the assessee has
also pointed out that it had some cash in hand also available from earlier years,
which aspect also cannot be doubted. Under such circumstances, I find that the
explanation given by the assessee was quite reasonable and, therefore, the
deduction on account of payment of HRA could not be denied to assessee.
Accordingly, order of ld. CIT(A) on the issue in question is set aside and the
assessee's claim is allowed.
Binu Nair Vs. ITO
5. In the result, assessee's appeal is allowed.
Order pronounced in open court on 09/09/2015..
Copy of order to:
5. DR, ITAT, New Delhi.
Binu Nair Vs. ITO
-+ Date Initial
1. Draft dictated on -09.2015 PS
2. Draft placed before author .09.2015 PS
3. Draft proposed & placed before the second JM/AM
4. Draft discussed/approved by Second JM/AM
5. Approved Draft comes to the Sr.PS/PS PS/PS
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk PS
8. Date on which file goes to the AR
9. Date on which file goes to the Head Clerk.
10. Date of dispatch of Order.