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Alka Mithal Versus ADIT, International taxation, Noida

2015 (11) TMI 731 - ITAT DELHI

Deductions as claimed by assessee U/S 57 and 80C denied - invoking the provisions of section 115D - Held that:- In the peculiar facts and circumstances of the case, the impugned order does not meet the requirements of law. The specific grievances of the assessee though have been reproduced in the impugned order however while arrived at a conclusion why they cannot to be accepted has not been addressed. The statutory mandate of section 250(6) of the Act is found to be not fulfilled. In view there .....

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ppeal has been filed by the assessee assailing the correctness of the order dated 14.07.2014 of CIT(A), Noida pertaining to 2009- 10 assessment year on the following grounds:- 1. That on the facts and on the circumstances of the case, the L'd Commissioner of Income Tax(Appeals) has erred in summarily upholding the disallowances made by the Assessing Officer. The L'd Assessing Officer has invoked the provisions of section 115D and consequentially denied the deductions as claimed by assess .....

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ssee wants not to be governed by the provisions of chapter XII-A . 3. The L'd Commissioner of Income Tax ( Appeals) as well as the Assessing Officer has failed to appreciate that by filing the return and claiming the deductions assessee has given deemed/implied consent that she does not want to be governed by the provisions of Chapter XII A of the Income Tax Act. 4. That the L'd Commissioner of Income Tax ( Appeals) has erred in upholding the action of the Assessing Officer wherein he ha .....

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rces as ₹ 4,13,758/- on which expenses were claimed amounting to ₹ 1,77,287/-. Apart from that the assessee was found to have made substantial investments in Mutual Funds. The assessee supported its claim stating that she had received foreign remittance amounting to ₹ 34,45,581/- from Sri. Gurkirpal Singh Sehgal who was her husband and this amount has been invested in mutual fund accounts for which advance loan of the stated amount had been made. For readyreference, the relevan .....

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is in reference to my earner submissions dated November 11.2011, December 8, 2011, December 9, 2011, December 12,2011 and December 19, 2011. The following documents have already been furnished to your Honours in support of my return :- a. Loan Confirmation from Professor Dr. Gurkirpal Singh Sehgal. b. Income Tax Return filed by Professor Dr. Gurkirpal Singh Sehgal, declaring the receipt of interest income. c. Source of funds from Professor Dr.Gurkirpal Singh Sehgal provided as a loan to me, Dr.A .....

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he written option exercised by the non-resident Indian assessee in his return of income under section 115-I, the assessee may elect not be governed by the special provisions of Chapter XII-A. Since the assessee was found not to have exercised her option for not being governed by the special provisions of this Chapter in return of income filed by her the income was assessed at ₹ 4,13,758/- by disallowing deduction claimed of ₹ 1,77,287/- u/s 57 and ₹ 1,00,000/- by disallowing de .....

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n of this chapter shall not apply to him for that assessment year and his total income for that assessment year shall be computed and tax on such total income shall be charged in accordance with the other provisions of the I T. Act. b. In this respect, I humbly submit that I filed my return under section 139 on Form ITR-2 as required by law. c. There is no provision in the new annexure-less, paperless or e-file return formats to file any special "declaration therein" as specified above .....

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ative went to file my return accompanied by the declaration prescribed under section 115-1 and other attachments, the receiving clerk returned all the attachments and refused to accept them, as expected under Rule 12(2) of Income Tax Rules which prohibit the attachment of any documents to the return. f. The income tax return form does not have any space or option for making such an election therein as stated in section 115-1 and described in paragraph 2(a) above. g. Similarly, the e-file, paperl .....

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d in 2 (a) above, but she refused to accept it stating that such an election needed to be filed with the income tax return. However, for reasons stated above it was not possible to file any such election or statement with the income tax return given the new requirements of the income tax rules as well as annexure-less, paperless formats and e-filing rules. j. I am attaching a copy of such a declaration as Annex 1 to this document. k. If Chapter XII, section 115 G is applied to my tax return, I w .....

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d since I would have been implicitly deemed to elect not to be governed by this Chapter Consequentially, the deduction U/S 57 as well as the deduction U/S 80C should be allowed and tax should be calculated as per the slab rate. 3. SECOND Ground For Appeal a. The Assessing Officer has cited Chapter XII A Section 115-D and denied the deduction for interest expense of ₹ 1,77,287.00, stating "As per Section 115D subsection (1), no deduction in respect of any expenditure or allowance shall .....

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defined in Section 115-C as "any income derived (other than dividends referred to in section 115-O) from a foreign exchange asset. " o. Further "Foreign Exchange Asset" is defined in section 115(b) which says "foreign exchange asset means any specified asset which the assesses has acquired or purchased with, or subscribed to, in convertible foreign exchange" f. Now section 115-C (f) specifically describes the meaning of the words "specified asset". The Ac .....

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assets as the Central government may specify in this behalf by notification in the Official Gazette. g. Please note that ALL of my income is from funds invested in various Mutual Funds. h. Since Mutual Funds are not specifically listed U/s 115(c)(f) above as contributing to Investment income , this section should not be considered applicable to me. 4. Since Section 115-D does not apply to me, the denial of deductions under Section 115-D should be reversed Consequentially, I request that the ded .....

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sband's return and then again in mine. I realize that there may not be a specific law that prevents this, but it is certainly against the principles of fairness and natural justice. It is the duty of the State to collect fair taxes. 1 humbly submit that the deduction of ₹ 1,77,287 be kindly allowed on this ground alone. 6. FOURTH - inaccuracies in a. In point 8 of her order, the Assessing Office states: "Section 115Eof the I. T. Act prescribes the rates of tax chargeable on certai .....

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ent year shall be computed and tax on such total income shall be charged in accordance with the other provisions of the I.T. Act. " b. Please note that Section 151 of the I.T. Act mentioned above deals with "Sanction for Issue of Notice". I am unable to understand how this section applies to my tax return. c. Please note that there is no section 151-I of the l.T. Act referred above - it simply does not exist d. In point 9.2 of her order, the Assessing Officer states that "Fur .....

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d to the above," e. There are several inaccuracies in point 9.2 cited above: i. I did not claim ₹ 1,00,000/- deduction under section 57. This deduction was claimed under section 80-C since I had invested ₹ 1,00,000/- in ELSS Canara Taxsaver Fund. A statement issued by Canara Mutual Fund proving this investment was provided to the Assessing Officer. ii. I have never agreed to the denial of this deduction and for the ₹ 1,00,000/- to be added back to my income. In fact, my le .....

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ction 80-C or section 57. 5. During appellate proceedings, Learned AR of the appellant further attended and filed following written submissions dated 02.07.2014:- In continuation of my earlier submissions dated 9.8.13, I further submit as under:- That the assessing officer has while passing the assessment order has mentioned that assessee has failed to me a written declaration as per section 115I, alongwith the return of income wherein he has to declare that the provisions of chapter XIIA i.e. s .....

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essee has given an implied declaration that the provisions of section 115D are not applicable to him. It is therefore humbly requested that the appeal of the assessee be kindly allowed and the deduction of interest paid be as well as deduction claimed u/s 80C be also allowed. Further directions be issued to calculate tax at normal rates instead of flat 20% as done by Assessing Officer. 6. In the said background, the finding arrived at in pages 12-14 it was submitted by the ld. AR is a mere justi .....

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