The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) held that the Commission of Income Tax (Appeals) [CIT(A)] adopted the entire salary instead of considering the Basic & DA while computing the benefit under Section 10(13A) of the Income Tax Act,1961 read with Rule 2A of the Income Tax Rules,1962, therefore remitted this issue to the file of Assessing Officer (AO) to re-examine the issue for the purpose of quantification of Housing Rent Allowance (HRA).
The assessee Ravindra R.V has claimed exemption under Section 10(13A) of the Income Tax Act towards the HRA which is part of his salary component amounting to Rs.1,02,564/-. While processing the return of income, the exemption claimed has been denied on the basis that amount claimed to have been the least of an amount equal to 50% of the Basic + DA or excess rent paid either 10% of salary or actual HRA received.
The AO denied the benefit under Section 10(13A) of the Income Tax Act on the reason that the return of income did not have specific details of breakup of Basic salary, DA, HRA, etc. and also return of income did not have specific window or caption, which could capture the data of HRA exemption.In the absence of suitable details while processing return under Section 143(1)(a) of the Income Tax Act, the benefit of HRA not given.
Aggrieved by the order the assessee filed an appeal before [CIT(A)] confirmed the order of AO.Further aggrieved the assessee filed an appeal before the Tribunal.
The Authorised Representative (AR) of the assessee Sheeresh Kumar Hegde, submitted that the salary details for the assessment year. According to him, the assessee is entitled for HRA exemption to the tune of Rs.1,02,564/- out of HRA received to the tune of Rs.1,79,440/- and computed the deduction under Section 10(13A) of the Income Tax Act read with Rule 2A of the Income Tax Rules, 1962.
Dr. Nischal appeared as Departmental Representative (DR).
The Bench comprising of Chandra Poojari, Accountant Member and MS. Madhumita Roy, Judicial Member observed that these details are not available in the return of income filed by the assessee along with Form No.16. It was further observed that the CIT(A) adopted the entire salary instead of considering the Basic & DA while computing the benefit under Section 10(13A) of the Income Tax Act read with Rule 2A of the Income Tax Rules.
The Tribunal found it appropriate to remit this issue to the file of AO to re-examine the issue for the purpose of quantification of HRA on the basis of Form No.16 filed by the assessee before lower authorities. Accordingly, the issue in dispute is remitted to the file of AO for reconsideration so as to grant deduction towards HRA.
Hence the appeal of the assessee was allowed for statistical purposes.
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