TaxTMI 
TaxTMI 
2012 (6) TMI 354
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....he Assessing Officer after examination of the assessee's claims, noted that daily allowance was fully exempt under section 10(17)(i) and constituency allowance was fully exempt under section 10(17)(iii) of the Act and allowed the eligible exemption amounting to Rs. 1,61,400, disallowing the balance amount of this claim of Rs. 2,76,481 (viz. Rs. 4,37,881 less Rs. 1,61,400). Besides this, a gift of Rs 15 lakhs allegedly made by the assessee to his son Sri B.N.Vijay Kumar was treated as an unexplained cash credits under section 68 of the Act and brought to tax in his hands. The Assessing Officer accordingly completed the assessment by an order under section 143(3) of the Act on 26.12.2009 determining the total income of the assessee at Rs. 19,04,811. 2.2 Aggrieved, the assessee went in appeal before the CIT(A). The CIT(A) after considering the claims of the assessee, dismissed the assessee's appeals on both issues of dispute (i) being the claim for exemption of expenditure under section 10(14) and 10(17) and exemption under section 57 of the Act and (ii) unexplained gift of Rs. 15 lakhs by order dt.27.12.2010. 3. The assessee is now in appeal before us challenging the order of t....
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....ed exemption under section 10(14) and 10(17) of the Act, the assessee ;should be allowed deduction under section 57 of the Act also. However, he submitted that, the Assessing Officer and learned CIT(A) while considering his claim did not allow the entire claim for deduction of other allowances of expenditure like constituency allowance under section 10(17)(iii) or under section 10(14) of the Act following the decision of the Visakhapatnam Bench of the ITAT in the case of M. Venkata Subbaiah Vs. ITO (2010) 127 ITD 399. In support of the proposition that these expenditure claimed are allowable as a deduction under section 57(iii) of the Act, the learned counsel for the assessee placed reliance on the decision of the Indore Bench of the Tribunal in the case of Jaswant Singh Vs. ITO reported in 96 TTJ 660. The learned Authorised Representative finally pleaded that the claims of the assessee be allowed. 5.4 The learned Departmental Representative, on the contrary, strongly supported the findings of the lower authorities that the assessee's claim for exemption under section 10(17) and 10(14)have been considered both by the Assessing Officer and the learned CIT(A) and that the learned ....
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.... the case of M. Venkata Subbaiah and with which we are in agreement. In para 21 of the order the Tribunal held that : "21 From a careful study of the amendments brought time to time in section 10(17) of the Act, we are of the view that Legislature has been quite conscious about the allowances granted to the MLAs or the MPs and time to time they are bringing enactments to grant exemption of particular type of allowances from the total income of the MLAs or MPs. Had it been a case that for all allowances section 10(14) can be invoked subject to proof of the expenditure to be incurred in respect of that purpose to which the allowances are given, there would be no need to make a necessary amendment time to time in section 10(17). We are, therefore, of the view that while dealing with the issue of special allowances granted to the MLAs or MPs has to keep in mind both the provisions of sections 10(17) and 10(14) of the Act and only those allowances are to be exempted from the total income of the assesses which are specified in these sections or rule 2BB of IT Rules. Under section 10(17), the Legislature has prescribed a particular limit up to which the allowances are to be exempted fr....
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.... issue of whether deduction of expenditure is to be allowed under section 57 of the Act from out of the salary income and other allowances granted to an MLA, which is to be assessed to tax under the head 'income from other sources.' The Bench after examination of this issue came to the following finding which portion is reproduced hereunder : "The learned Commissioner (Appeals) also discussed the provision laid down under section 57 of the Act and was of the view that the same does not provide for any deduction for such income. The learned Commissioner (Appeals) accordingly, came to the conclusion that in the scheme of taxing the income from other sources, the Income Tax Act, 1961, did not provide for any deduction under section 57 from the fixed salary and allowances received by the assessee by virtue of his election to the State legislative and the assessee could not have been allowed his estimated claim of deduction of Rs. 79,016. The same has been questioned by the assessee before us. We after carefully considering the arguments advanced by the parties and the orders of the lower authorities find force in the first appellate order but with this modification therein on our pa....
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.... of loan of Rs. 15 lakhs to him in order to explain the source of gift. The learned Authorised Representative failed to do so inspite of being provided opportunity for providing this crucial and clinching evidence. 6.2 The learned Departmental Representative, on her part supported the finding of the lower authorities that the source of the alleged gift of Rs. 15 lakhs given to the son of the assessee was unexplained and has been rightly treated as unexplained cash credits under section 68 and brought to tax in the assessee's hands. The learned Departmental Representative submitted that the Assessing Officer noted from the capital account of Sri Siddarameswara Traders, where the assessee's son Sri B.N. Vijay Kumar was proprietor, that the assessee had given his son gifts of Rs. 15 lakhs. On being asked to furnish souces thereof, the assessee vide letter dt.17.12.2009 stated that the source for the same is from loan obtained from Canara Bank of Rs. 15 lakhs, withdrawal from partnership firm and also from HUF source (agricultural income). The Assessing Officer noted that apart from this letter, no documentary evidence was furnished to substantiate the claim like loan sanction order....
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.... assessee had given a gift of Rs. 15 lakhs to his son Sri B. N. Vijay Kumar as reflected in the son's capital account in his proprietorship concern M/s. Sri Siddarameswara Traders. It is a matter of record that when questioned about the source of Rs. 15 lakhs gifted to his son, the assessee merely furnished an explanation in letter dt.17.12.2009 without any corroborative evidence or documentary proof to substantiate the claim and therefore the Assessing Officer, finding that two cash deposits of Rs. 8 lakhs and Rs. 7 lakhs in the assessee's Canara Bank account on 17.7.2006 preceeded the gift of Rs. 15 lakhs given on the same day, held that the source of the gifts was unexplained and brought these cash credits to tax in his hands as unexplained cash deposits under section 68 of the Act. Before the learned CIT(A) too the assessee put forward similar explanations in an attempt to explain the source of the gifted amount of Rs. 15 lakhs, but failed to furnish and corroborative documentary evidence. While dismissing the assessee's claim, the learned CIT(A) recorded in paras 4.6 to 4.9 of his order that the assessee could not furnish a copy of sanction letter for loan of Rs. 15 lakhs clai....