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TMI Blog2018 (9) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... ring of appeal. 6. Whether as the facts & circumstances of the case the learned CIT (A) the assessment was 147 since income escaped shown in the reasons recorded was not added and accepted as genuine." 2. At the time of hearing the ld. Counsel for the assessee has stated at bar that the assessee does not press ground nos. 1 & 2 of the appeal and the same may be dismissed. The ld. D/R has raised no objection if ground nos. 1 & 2 are dismissed as not pressed. Accordingly, ground nos. 1 & 2 of the assessee's appeal are dismissed being not pressed. Ground Nos. 3 & 4 are regarding disallowance of HRA exemption of Rs. 90,834/- claimed under section 10(13A) of the IT Act. 3. In this case the AO issued a notice under section 148 on 25th March, 2015 proposing to assess the income on account of credit card expenditure of Rs. 3,00,117/- from his bank account with ICICI Bank. The AO also noted in the reasons that as per the system no return of income has been filed for the assessment year under consideration. The assessee filed e-ITR on 24.08.2015 in response to the notice under section 148 of the Act wherein the assessee has declared gross salary income of Rs. 9,08,341/- and total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material on record. We note that the AO has issued notice under section 142(1) and raised specific queries regarding the claim of deduction under section 10(13A) of Rs. 1,07,084/-. This is evident from the para 3 of the assessment order wherein the AO stated that vide notice under section 142(1) with queries the assessee was asked to justify the claim of deduction/exemption under section 10(13A) with supporting evidence. We find that neither before the authorities below nor before us the assessee has produced any evidence to show the actual payment of rent. Even if the amount of Rs. 1,07,084 is considered as actual payment of rent by the assessee, the allowable deduction computed by the AO as per the provisions of Rule 2A of the IT Rules comes to Rs. 16,250/- being the excess of 10% of the salary or the actual rent paid whichever is less. Thus the salary of the assessee is undisputedly Rs. 9,08,341/- and 10% of the same comes to Rs. 90,834/-. Thus the excess of Rs. 90,834/- of actual rent paid is an allowable deduction and hence the difference between actual rent paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, I disallow Rs. 90,834/- out of the claim of exemption of HRA of Rs. 1,07,084/- on this account and the same is added to the total income of the assessee during the year under consideration." In the absence of any contrary material brought on record by the assessee, we do not find any error or illegality in the order of the AO restricting the claim of exemption of HRA to Rs. 16,250/-. Accordingly, ground nos. 3 & 4 of the assessee are dismissed. Ground No. 6 regarding the addition made by the AO in the reassessment proceedings is challenged as not sustainable on technical reason. 6. The ld. A/R of the assessee has submitted that the AO has reopened the assessment to assess the income of Rs. 3,00,117/- on account of credit card bill during the year under consideration. However, the AO has not made any addition on account of credit card expenditure in the reassessment order. Therefore, the AO cannot make any other addition. He has thus contended that when the AO has not made any addition of income which he initially formed reason to believe has escaped assessment but finally found no escapement, then it is not open to him to assess some other income. In support of his contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders of the AO as well as ld. CIT (A) and submitted that the AO has specifically given the finding that the said return was not a valid return as it was not available in the system. Therefore, the return which is non est cannot be considered as a return available with the AO. 7. We have considered the rival submissions as well as the relevant material on record. The assessment was reopened by the AO by recording the reasons as under :- " As per AIR information generated from the system, the assessee has made payment against credit card bill amounting to Rs. 3,00,117 from his bank account with ICICI Bank, during F.Y. 2007-08 relevant to A.Y. 2008-09. Since as per system no return of income has been filed for A.Y. 2008- 09, the above transaction is not verifiable. I have therefore reasons to believe that on account of not filing of return by the assessee, income chargeable to tax has escaped assessment. In view above, I have reasons to believe that the income to the extent of Rs. 3,00,117/- has escaped assessment within the meaning of section 147 of the IT Act, 1961 and this is a fit case for issuance of notice u/s 148." Thus the AO proposed to assess the income on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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