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2006 (8) TMI 518 - AT - Income TaxChargeability to tax - Interest income - receipt of incomes - maintained a separate bank account - professional fees received from the clients in his capacity as a solicitor for the purpose of discharging obligations of the clients - Expenditure in respect of use of motor car, telephone, printing and stationery - Nature of expenditure - HELD THAT:- It is true that when the assessee did not disclose the interest income in the original returns of income filed by him, he wrongly claimed deduction for TDS. As per the provisions of section 199 of the Act, credit for TDS shall be allowed for the assessment year for which the relevant income is brought to the charge of the tax. When the income itself, was not shown by the assessee, in the original return of income, the claim for TDS was patently wrong. However, that should not be a reason for bringing to the charge of tax such income, which is not chargeable to tax at all in the hands of the assessee as per the provisions of law. The Assessing Officer is within his right to deny credit for the TDS but he cannot bring to the charge of tax the income, which is not assessable in the hands of the assessee. Thus, we hold that the relevant interest income is not chargeable in the hands of the assessee and we direct the Assessing Officer to exclude such income from the assessee’s total income for all the assessment years under appeal. The Assessing Officer is also directed to withdraw the credit in respect of TDS allowed to the assessee for all the assessment years. Expenditure in respect of use of motor car, telephone, printing and stationery - Nature of expenditure - HELD THAT:- No material was produced before us to controvert the finding of the ld CIT(A) or to show that no part of the expenditure is in the nature of personal expenditure of the assessee. The ld CIT(A) has sustained disallowance merely at 10 per cent. of the telephone expenses, motor car and depreciation on motor car. In the facts of the case, this cannot be said to be unreasonable or excessive. The disallowance of printing and stationery expenses have been deleted by the ld CIT(A) except for the assessment year 1995-96. We fail to understand as to why such disallowance should be sustained for the assessment year 1995-96 when for all the assessment years there is a consistency finding by the ld CIT(A) that this expenditure was entirely for professional purpose. Therefore, for the assessment year 1995-96, we modify the order of the ld CIT(A) to the extent that the disallowance from out of the printing and stationery expenses is directed to be deleted. With regard to the disallowances from out of other expenses as mentioned, orders of the ld CIT(A) are upheld. In the result, the appeals of the assessee are partly allowed.
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