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TMI Blog1998 (8) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... is that he had offered an amount of ₹ 7,349 as income from other sources as can be seen from page-1 of the paper compilation filed. In the accounting year relevant to assessment year 1990-91, he received a sum of ₹ 13,125 from Kalpataru Enterprises and a sum of ₹ 25,094 from Suvidha Builders both put together making a sum of ₹ 38,219 as interest. He is showing this interest amount as income from other sources . The assessee filed rectificatory letters dated 5-3-1992 and 11-2-94. In the alternative, he says that with reference to a sum of ₹ 6,219, there was a double addition. He says that while returning a sum of ₹ 7,349, the impugned sum of ₹ 6,219 was already taken into consideration. As already stated, the gross total income, from out of which ₹ 7,349 was derived, was ₹ 57,168.70. The particulars of ₹ 57,168.70 were given at Schedule I now found at page-9 of the paper compilation. The particulars mentioned in Schedule I are as follows : Income from other sources Rs. 1. NSC ACC Interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first time, Schedule I was filed before the DC(A). It was further explained before him that the assessee was 67 years old and he was unable to manage his affairs on his own and therefore he had appointed two persons, one for managing the day-to-day affairs and the other for outdoor jobs. The names of the employees as well as the amounts of salary paid to them were shown and the total amounted to ₹ 19,500. He requested that section 143(1)(a) intimation should be suitably modified. Schedule I discloses only ₹ 39,349, for which a sum of ₹ 32,000 was debited towards expenses which includes salary, conveyance, professional fees, telephone expenses and sundry expenses. Therefore, the DC(A) took the view that for earning the interest income of ₹ 39,349, he had to incur expenses of ₹ 32,000. The DC(A) held that the sum of ₹ 32,000 did not pertain to the income earned under the head Other sources and it was wrongly debited to his income. Whether the sum of ₹ 32,000 can be deducted or not is not a debatable issue and, therefore, he held that the assessee s claim is totally wrong against income under other sources. He dismissed the appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter and, therefore, inter alia, the amount of ₹ 19,500 towards salaries of the employees should be taken to be part of the sum essential to earn the income from other sources , cannot be accepted. The assessee did not place any material whatsoever to show the necessity of employing persons to collect interest amounts. Apart from salaries, a sum of ₹ 6,550 was said to have been incurred towards conveyance. A sum of ₹ 1,500 was said to have been incurred towards professional fees. A sum of ₹ 2,550 was said to have been incurred towards telephone expenses and a sum of ₹ 1,900 towards sundry expenses thus totalling the items of expenditure to ₹ 32,000 to earn an interest income of ₹ 39,349. I asked the assessee s counsel two questions. Firstly, I ascertained from him whether the assessee is an old assessee or a new assessee. The learned counsel for the assessee submitted that he is an old assessee and he is on the rolls of the Income-tax Department since a long time. Secondly, I asked him to furnish his statement of income filed for earlier years along with his income-tax return in order to compare the expenditure said to have been incurred fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii)The Scheme will apply in cases where the total income of the individuals, Hindu undivided families, etc., exceeds ₹ 5,000. (iv)In a case where the total income exceeds ₹ 5,000, net agricultural income, irrespective of its quantum, will be taken into account for purposes of determining the rates of income-tax to be applied to the non-agricultural income. There is no minimum limit in respect of net agricultural income for the purpose. According to the circular, the scheme adumbrated would apply only in cases where the assessee s (either individual or HUF etc.) total income exceeds ₹ 5,000. In such a case, the net agricultural income, irrespective of its quantum, will be taken into account for purposes of determining the rates of income-tax to be applied to the non-agricultural income. There is no minimum limit in respect of net agricultural income for the purpose. Then the question is how to compute the income-tax in cases covered by the scheme. The opening portion of para-12 of the circular is as follows : 12. Calculation of income-tax in cases covered by the Scheme.- In cases covered by the Scheme, income-tax will be calculated in the following m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds having been raised for the first time in the second appeal stage cannot be entertained and the plea of the assessee should be thrown out on that very ground. On the other hand, the ld. counsel for the assessee contended that he had already disclosed ₹ 54,000 as agricultural income of the assessee in his income-tax return. What he forgot was to claim the rebate which is available to him under section 2(2) of the relevant Finance Act and this is only a mistake of law since the whole material on the basis of which this mistake can be found out was all available. Nothing prevents the Tribunal to entertain this plea even at the second appellate stage for the first time. In support of this contention, the learned counsel for the assessee relied upon the latest Supreme Court decision in National Thermal Power Corporation Ltd. v. CIT [1998] 229 ITR 383/ 97 Taxman 358 , in which case the earlier Supreme Court decision rendered in Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688, on which the Departmental Representative heavily relied upon, was explained and distinguished. The learned counsel for the assessee relied upon the categorical decision of the Supreme Court found at pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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