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TMI Blog2013 (9) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and Gains of Business, Profession or Vocation - It is due to the absence of any legislative provision that these receipts cannot be treated as business income falling under the head "Profits and Gains of Business, Profession or Vocation" carried on by the assessee during the relevant year. They cannot be included in the total income of the assessee, even though the amount was received by the assessee before the discontinuance of his profession due to his elevation as High Court Judge - Following decision of Commissioner of Income Tax v. Justice R.M. Datta [1989 (7) TMI 59 - CALCUTTA High Court] and Nalinikant Ambalal Mody. Versus S. A. L. Narayan Row, Commissioner Of Income-Tax, Bombay City I. [1966 (5) TMI 13 - SUPREME Court] - Decided against Revenue. Disallowance of expenses - Expenditure on printing and stationery, conveyance, telephone and accounting, etc. - Held that:- since the gross receipts are not liable to tax, the expenditure incurred for recovery of outstanding fees and for maintaining books of account cannot be disallowed and no such disallowance was called for - Decided against Revenue. - ITA No. 5069/Del/2012 - - - Dated:- 28-6-2013 - Shri G. D. Agrawal And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in the relevant A.Y. 2009-10 whereas these expenses pertained to the period when the assessee did not carry any profession. 6. In the facts and circumstances of the case, the Ld. CIT(A) erred in admitting the additional ground of the assessee to allow credit of TDS of Rs.53,351/- which the assessee omitted to claim in his return of income and directing the AO to allow credit of TDS as per law since as per provisions of Income Tax Act 1961, the credit of TDS can be given only if the assessee has claimed TDS credit in his return of income. 7. In the facts and circumstances of the case, the Ld. CIT (A) erred in admitting the additional ground of the assessee to allow credit of TDS of Rs.53,351/- which he omitted to claim in his return of income wrongly relying on the judgment of the Hon'ble Supreme Court in the case of Goetze India Ltd Vs CIT (284 ITR 323) wherein the Hon'ble Apex Court has given observations with regard to the powers of Hon'ble ITAT. Hence the same cannot be extended to the powers of the CIT (A)." 2. Ground Nos.1 to 4 challenge the action of the CIT (A) in deleting the addition of Rs.67,86,669/- made by the Assessing Officer on account of arrears of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both these High Courts were at variance, inter se, on the issue. The Assessing Officer noted that in 'Nalinikant Ambalal Mody', 61 ITR 428 (SC), the Hon'ble Supreme Court had held such receipts to fall under the head of 'Profits and gains of Business or Profession'. The Assessing Officer observed that though therein, the Hon'ble Supreme Court had held such receipts to be not chargeable to tax, it had been so held due to the absence of express provision to bring such receipts to tax under the IT Act, 1922, which was the Act governing that case. The Assessing Officer stated that however, such receipts are chargeable to tax under Section 176 (4) of the IT Act, 1961, the Act applicable to the present case. 5. By virtue of the impugned order, which we shall presently discuss, the ld. CIT (A) deleted the addition made by the Assessing Officer, bringing the Department in appeal before us by way of ground Nos.1 to 4. 6. Challenging the impugned order in this regard, the Ld.DR has submitted before us that the ld. CIT(A) has erred in deleting the addition correctly made by the Assessing Officer; that while doing so, the ld. CIT (A) has erroneously disregarded the provisions of Section 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, having been passed perfectly in accordance with law and it is, therefore, entitled to be sustained, and the appeal filed by the Department is liable to be dismissed, being devoid of any merit at all, whatsoever; and that accordingly, the impugned order be confirmed and the appeal be ordered to be dismissed. 8. We have heard the parties on this issue and have perused the material on record with regard thereto. The question is as to whether the ld. CIT (A) has rightly allowed the claim of the assessee for exemption from tax, the receipt of arrears of his professional fees, such arrears having been received by the assessee after his elevation as High Court Judge. 9. The Assessing Officer brought to tax these arrears under Section 176 (4) of the Income Tax Act, 1961. This Section (relevant portion) provides as under:- "176 (4) Where any profession is discontinued in any year on account of the cessation of the profession by ........., the person carrying on the profession, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Justice R.M. Datta' (supra), in such a case, the rule of construction adopted by Rowlett J. in 'Cape Brandy Syndicate v. IRC',(1921) 1 KB 64 would be properly applied, as per which rule, in a taxing Act, one has to look merely at what is clearly said, nothing is to be read in, nothing is to be implied, there being no room for any intendment, one can only look fairly at the language used. 13. And as considered in 'CIT vs. Ajax Products Ltd.', 55 ITR 741 (SC), the subject is not to be taxed unless the charging provision clearly imposes the obligation and it is also the rule of construction that if the words of a statute are precise and unambiguous, they must be accepted as declaring the express intention of the legislature. Now, it has been elaborately considered in 'Justice R.M. Datta' (supra), that the word 'accordingly' in Section 176 (4) of the Act cannot be considered as indicative of the head of charge, i.e., that the income should be deemed to be the income falling under the head "Profits and gains of Business, Profession or Vocation", even in a case where the profession is not carried on during any part of the relevant previous year. It has also been considered therein tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a certain income seems to fall within the charging Section, there is no scheme of computation for quantifying it, which conclusion is not the legislative intent. In 'Justice R.M. Datta' (supra), their Lordships held that in view of this ratio in 'Nalinikant Ambalal Mody' (supra), despite the insertion of Section 176 (4) in the Act, since the assessee did not carry on any profession in the relevant previous year, the receipt cannot be taxed u/s 28 of the Act, since Section 176 (4) does not contain any deeming provision treating such receipt as income falling under the head "Profits and Gains of Business, Profession or Vocation" and also, it cannot be taxed as income from other sources u/s 56 of the Act. 15. The facts herein being entirely in pari materia with 'Justice R.M. Datta' (supra), the said decision is squarely applicable here too. It has not been shown otherwise. Further, no decision to the contrary has been brought to our notice. 16. It has been stated that a Review Petition in the case of 'DCIT, New Delhi vs. Justice Swatanter Kumar Agnihotri' (ITA No.160/2000), wherein, the reliance by the Delhi Bench of the Tribunal on 'Justice R.M. Datta' (supra), under similar cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not liable to tax, the expenditure incurred for recovery of outstanding fees and for maintaining books of account cannot be disallowed and no such disallowance was called for. The Ld. CIT (A) has correctly deleted this disallowance. Ground No.5 is, accordingly, rejected. 23. So far as regards Ground Nos.6 and 7, the assessee sought credit of TDS of Rs. 53,351/-, which was inadvertently omitted from being claimed in the return of income. The Ld. CIT (A) allowed such credit to the assessee. 24. The Ld. CIT (A), it is seen, has taken into consideration the fact that it was an inadvertent error which led to the omission of claiming the TDS in the return of income. The CIT (A) directed to verify the claim and to allow the credit as per law. The grievance of the department is that the credit of TDS could have been given only if the assessee had made the claim of TDS credit in his return of income and that the decision in 'Goetze India Ltd. vs. CIT', 284 ITR 323 (SC) has been wrongly applied by the Ld. CIT (A) to extend the credit to the assessee, even in the absence of the claim in the return of income filed. The department maintains that the observations in 'Goetze India Ltd.' ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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