Income Tax Officer, Ward-1, Nellore V. M/s. Rohini Engineering, Nellore

ITA 1051/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66353 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 1051/HYD/2012 ASSESSMENT YEAR 2009-10 THE INCOME TAX OFFICER WARD-1 NELLORE VS. M/S. ROHINI ENGINEERING NELLORE PAN: AAHFR8505Q APPELLANT RESPONDENT APPELLANT BY: SMT. AMISHA S. GUPT RESPONDENT BY: NONE DATE OF HEARING: 15 . 1 0.2012 DATE OF PRONOUNCEMENT: 15.10.2012 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), GUNTUR DATED 20.04.2012 FOR ASSESSMENT YEAR 2009-10. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) ERRED IN PASSING SUCH AN ORDER W HICH HAS LED TO TURN THE REVISED INCOME INTO A NEGATIVE FIGURE. 2. THE LEARNED CIT(A) OUGHT NOT TO HAVE ALLOWED REMUNERATION, INTEREST AND DEPRECIATION FROM THE IN COME ESTIMATED. 3. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE VOL UME OF THE BUSINESS AND THE MEAGRE TAXES PAID THEREON BY T HE ASSESSEE. 3. IN THIS CASE THE ASSESSING OFFICER ESTIMATED THE IN COME OF THE ASSESSEE AT 6% OF THE GROSS RECEIPTS. AFTER ESTIMA TING THE INCOME, HE CONSIDERED INTEREST RECEIPT SEPARATELY. THE CIT(A) CONFIRMED THE ESTIMATION OF INCOME AT 6%. HOWEVER, HE DIRECTED T HE ASSESSING OFFICER TO ALLOW DEDUCTION TOWARDS REMUNERATION TO PARTNERS , INTEREST AND DEPRECIATION. FURTHER REGARDING THE INTEREST INCOM E, HE DIRECTED THE 2 ITA NO. 1051/HYD/2012 M/S. ROHINI ENGINEERING ================== ASSESSING OFFICER TO CONSIDER THE NET INTEREST. AG AINST THIS THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MATERI AL ON RECORD. NONE APPEARED FOR THE ASSESSEE. WE CONFIR M THE ESTIMATION OF INCOME AT 6% OF THE GROSS RECEIPTS FROM BUSINESS. HOWEVER, THE OTHER FINDINGS OF THE CIT(A) ARE TOTALLY IRRELEVANT AND B ASELESS WHICH CANNOT BE UPHELD. ONCE THE INCOME IS ESTIMATED, ALL THE D EDUCTIONS ALLOWABLE UNDER THE PROVISIONS OF SECTIONS 30 TO 38 OF THE AC T SHALL BE DEEMED TO HAVE BEEN ALREADY GIVEN FULL EFFECT. NO FURTHER DE DUCTION COULD BE GIVEN. BEING SO, NO DEDUCTION TOWARDS DEPRECIATION COULD BE GIVEN ONCE THE INCOME IS ESTIMATED AT 6%. HOWEVER, DEDUC TION TOWARDS INTEREST AND REMUNERATION TO PARTNERS HAS TO BE ALL OWED SEPARATELY AS IT IS ALLOWABLE U/S. 40(B) OF THE INCOME-TAX ACT, 1961 SUBJECT TO THE LIMIT PROVIDED THEREIN. FURTHER, WE MAKE IT CLEAR THAT T HE INTEREST AND REMUNERATION TO PARTNERS IS TO BE ALLOWED ONLY IN T HE EVENT IF IT IS PROVIDED IN THE PARTNERSHIP DEED OF THE ASSESSEE FI RM AND IT WAS ALREADY CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME AND REFLECTED IN THE COMPUTATION OF INCOME. SIMILARLY, THE INCOME FROM INTEREST, IF ANY, WHICH IS ASSESSED UNDER THE HEAD 'INCOME FROM OTHER SOURCES' HAS TO BE BROUGHT TO TAX SEPARATELY. IT CANNOT BE NETTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER, 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 15 TH OCTOBER, 2012 TPRAO 3 ITA NO. 1051/HYD/2012 M/S. ROHINI ENGINEERING ================== COPY FORWARDED TO: 1. THE INCOME TAX OFFICER, WARD - 1, 24 - 2 - 438, GNT ROAD, DARGAMITTA, NELLORE. 2. M/S. ROHINI ENGINEERING, 4/440, NDR LAYOUT, USMANSA HEBPET, NELLORE. 3 . THE CIT(A), GUNTUR 4 . THE CIT, GUNTUR 5 . THE DR B BENCH, ITAT, HYDERABAD