Shree Maheshwari Industries, Mathura V. ACIT-3, Mathura

CO 38/AGR/2009

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 4419 (ITAT-AGRA)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-02-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2011
• Assessment Year: misc
• Appeal Filed On: 07-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M M AGARWAL
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC) BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER C.O. NO. 38/AGRA/2009 (IN ITA NO. 314/AGRA/2009) ASSTT. YEAR : 2002-03 SHREE MAHESHWARI INDUSTRIES, VS. A.C.I.T. -, MAT HURA. 4, RAS BEHARI SADAN, HARI NIKUNJ CROSSING, VRINDABAN, MATHURA. (PAN : AAHFS 7159 R) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI M.M. AGARWAL, C.A. FOR RESPONDENT : SHRI VINOD KUMAR, JR. D.R. ORDER THE AFOREMENTIONED APPEAL AS WELL AS THE CROSS-OBJE CTION CAME UP FOR HEARING BEFORE THE SMC BENCH, AGRA, WHICH WERE DISPOSED OF VIDE ORDER DATED 18.02.2010 BY PARTLY ALLOWING THE APPEAL FILED BY THE REVENUE FOR STATISTICAL PURPOSE S AND THE GROUND NO. 4 OF THE CROSS OBJECTION FILED BY THE ASSESSEE STOOD DISMISSED AS NOT PRESSE D. AGGRIEVED BY THE ORDER DATED 18.02.2010, THE ASSESSEE FILED A MISCELLANEOUS APPLICATION NO. 15/AGRA/2010 IN C.O. NO. 38/AGRA/2009 FILED IN ITA NO. 314/AGRA/2009, REQUESTING THAT WHILE DIS POSING OF THE CROSS OBJECTION, THE TRIBUNAL HAS MENTIONED THAT GROUND NO. 4 RAISED IN CROSS OBJ ECTION HAS NOT BEEN PRESSED BY THE ASSESSEE WHILE THE FACT WAS THAT THE ASSESSEE DULY PRESSED T HIS GROUND AND ARGUED THE SAME. TO SUPPORT THIS VERSION, THE ASSESSEE HAD ALSO FILED AN AFFIDA VIT REQUESTING THAT THE ORDER DATED 18.02.2010 DISMISSING THE CROSS OBJECTION MAY BE RECALLED AND ISSUE INVOLVED IN GROUND NO. 4 MAY BE DECIDED ON MERITS. THE LD. D.R. HAS NOT RAISED ANY OBJECTION ON THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE AND THE BENCH ALLOWED THE MISC. APPLIC ATION NO. 15/AGRA/2010 (SUPRA) AND RECALLED THE ORDER DATED 18.02.2010 ONLY FOR THE PURPOSE OF DISPOSING OF THE GROUND NO. 4 VIDE SMC 2 BENCH ORDER DATED 25.03.2011. IN COMPLIANCE OF THE SAME, THE AFORESAID CROSS OBJECTION HAS COME UP FOR HEARING BEFORE ME. 2. SHRI M.M. AGARWAL, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE STATED THAT THE ISSUE INVOLVED IN GROUND NO. 4 OF THE CROSS OBJECTION HAS ALREADY BEEN DECIDED BY THIS BENCH IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE, I.E., I TA NO. 315 & 316/AGRA/2009 AND C.O. NO. 01 & 02/AGRA/2010 DATED 25.02.2011. HE ALSO DREW MY AT TENTION TOWARDS THE GROUNDS RAISED IN THE CROSS OBJECTION NO. 01 & 02/AGRA/2010 FILED IN ITA NO. 315 & 316/AGRA/2009 WHICH ARE SIMILARLY DRAFTED EXCEPT THE DIFFERENCE OF AMOUNT O F REMUNERATION PAYABLE TO THE PARTNERS. HE REQUESTED THAT THE ISSUE INVOLVED IN GROUND NO. 4 I N THE PRESENT CROSS OBJECTION MAY BE ALLOWED IN THE SAME TERM. 3. ON THE CONTRARY, THE LD. DR HAS NOT RAISED ANY O BJECTION ON THE REQUEST OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. AFTER HEARING BOTH THE PARTIES AS WELL AS THE IS SUE INVOLVED IN GROUND NO. 4 IN THE PRESENT C.O. AND THE FINDING GIVEN BY THIS BENCH IN ITA NO. 315 & 316/AGRA/2009 AND C.O. NO. 01 & 02/AGRA/2010, I AM OF THE CONSIDERED OPINION THAT T HIS BENCH HAS ALREADY DECIDED THE ISSUE IN DISPUTE MENTIONED IN GROUND NO. 4 OF THE CROSS OBJE CTION IN FAVOUR OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE, THE ISSUE INVOLVED IN GROUND NO. 4 IN THE PRESENT CROSS OBJECTION AS WELL AS THE FINDING GIVEN BY THIS BENCH IN ITA NO. 315 & 316/AG RA/2009 AND C.O. NO. 01 & 02/AGRA/2010 (SUPRA) IN ASSESSEES OWN CASE ARE REPRODUCED AS UN DER : 22. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSID ERED THE SAME. IN OUR OPINION, WHEN THE ASSESSEE CLAIMS DEDUCTION FOR ANY EXPENSE, THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE EXPEND ITURE. THE ASSESSEE HAS CLAIMED PARTNERS REMUNERATION AT RS.1,20,000/-. TH E ASSESSING OFFICER ASKED FOR 3 THE PARTNERSHIP DEED WHICH WAS NOT FILED AND IT WAS STATED THAT THE PARTNERSHIP DEED WAS MISPLACED. THE COPY OF THE PARTNERSHIP DEE D WAS FILED BEFORE THE CIT(A), AS APPEARS FROM THE SUBMISSIONS, REPRODUCED AT PAGE 24 OF THE CIT(A)S ORDER. WE MAY POINT OUT THAT THE REMUNERATION TO TH E PARTNERS IS ALLOWABLE U/S. 37 OF THE INCOME-TAX ACT BEING THE EXPENDITURE INCURRE D WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. SECTION 40(B) PUTS AN EMBA RGO AND RESTRICTS THE ALLOWANCE OF THE REMUNERATION. SUB-CLAUSE (V) OF SE CTION 40(B) CLEARLY STATES THAT REMUNERATION HAS TO BE ALLOWED TO A WORKING PARTNER AUTHORIZED IN ACCORDANCE WITH THE TERMS OF THE PARTNERSHIP DEED. IT ALSO LAY S DOWN THE AGGREGATE AMOUNT TO WHICH THE REMUNERATION WILL NOT EXCEED. WE, THEREFO RE, IN THE INTEREST OF JUSTICE AND FAR PLAY TO BOTH THE PARTIES, SET ASIDE THE ORD ER OF CIT(A) ON THIS ISSUE AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER WITH THE DIRECTION THAT THE ASSESSING OFFICER SHALL ALLOW THE DEDUCTION TO THE ASSESSEE IN RESPECT OF THE REMUNERATION PAID TO THE PARTNERS TO THE EXTENT AS LAID DOWN U/S. 40(B)(V) PROVIDED THE ASSESSEE COMPLIES WITH THE CONDITIONS GIVEN U/S. 40(B)(V). THUS, THIS GROUND IS ALLOWED IN BOTH THE ASSESSMENT YEARS FOR STATISTICAL PURPOSES. 5. AFTER GOING THROUGH THE AFORESAID FINDING GIVEN BY THIS BENCH, I AM OF THE CONSIDERED OPINION THAT THE ISSUE INVOLVED IN GROUND NO. 4 IN THE PRESENT CROSS OBJECTION HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE. RESPECTIVELY FOL LOWING THE SAME, THE ISSUE INVOLVED IN NO. 4 IS ALLOWED IN THE SAME TERM AS IN ITA NO. 315 & 316/AG RA/2009 AND C.O. NO. 01 & 02/AGRA/2010 (SUPRA) VIDE ORDER DATED 25.03.2011. I, THEREFORE, SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSING OFFICER SHALL ALLOW DEDUCTION TO THE ASSESSEE IN RESPECT OF REMUNERATION PAID TO THE PARTNERS TO THE EXTENT AS LAID DOWN U/S. 40(B)(V) PROVIDED THE ASSESSEE CO MPLIES WITH THE CONDITIONS GIVEN U/S. 40(B)(V). THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOS ES. 6. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.06.2011. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 8 TH JUNE, 2011 *AKS/- 4 COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY