JKM Leathers, CHENNAI V. DCIT,

ITA 1447/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8577 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 23-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVASJCIT
• Keywords: Wrong claim

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1447/MDS/2016 * +* / ASSESSMENT YEAR : 2010-11 M/S JKM LEATHERS, SWAMI HOUSE, NO.4, VASANTHA GARDEN STREET, AYYANAVARAM, CHENNAI - 600 023 PAN : AAAFJ 3122 A V. THE DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 10(1), CHENNAI - 600 034. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SH. SAROJ KUMAR PARIDA, ADVOCATE /0-. 1 2 / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT ' 1 3& / DATE OF HEARING : 28.07.2016 45+ 1 3& / DATE OF PRONOUNCEMENT : 15.09.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 12, CHEN NAI, DATED 22.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DISALLOWANCE OF REMUNERATION PAID TO PARTNERS. 2 I.T.A. NO.1447/MDS/16 3. SH. SAROJ KUMAR PARIDA, THE LD.COUNSEL FOR THE A SSESSEE, SUBMITTED THAT THE ASSESSEE HAS PAID ` 4,60,000/- TOWARDS PARTNERS REMUNERATION. AS PER THE PARTNERSHIP DEED, THE REM UNERATION WAS ` 3,60,000/-. REFERRING TO SUPPLEMENTARY PARTNERSHIP DEED, THE LD.COUNSEL SUBMITTED THAT THE REMUNERATION PAYABLE TO PARTNERS WAS AMENDED AND THE ASSESSEE-FIRM IS LIABLE TO PAY REMU NERATION TO EACH PARTNER AT ` 34,175/- PER MONTH. INSPITE OF THIS AMENDED PARTNERSHIP DEED, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. REFE RRING TO THE OBSERVATION MADE BY THE CIT(APPEALS), MORE PARTICUL ARLY AT PARA 8.4, THE LD.COUNSEL SUBMITTED THAT THE CIT(APPEALS) DISBELIEVED THE SUPPLEMENTARY DEED ON THE GROUND THAT IT WAS EXECUT ED ON 01.04.2009 AND THE STAMP PAPER WAS DATED 03.04.2009 . ACCORDING TO THE LD. COUNSEL, IT IS ONLY A TYPOGRAPHICAL ERRO R, THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN DISALLOWING THE CL AIM OF THE ASSESSEE. 4. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE PARTNERSHIP DEED ENABLES THE PARTNERSHIP FIRM TO PAY A SUM OF ` 3,60,000/- TOWARDS REMUNERATION TO PARTNERS, WHICH WAS IN FACT ALLOWED BY THE ASSES SING OFFICER. THE 3 I.T.A. NO.1447/MDS/16 ASSESSEE, HOWEVER, PAID ` 8,20,000/-. IN OTHER WORDS, THE ASSESSEE HAS PAID ` 4,60,000/- OVER AND ABOVE ` 3,60,000/-. THE ASSESSING OFFICER HAS ADDED THIS AMOUNT OF ` 4,60,000/- TO THE TOTAL INCOME OF THE ASSESSEE. THE MAIN CLAIM OF THE ASSESSEE, ACCO RDING TO THE LD. D.R., WAS THAT THE PARTNERSHIP DEED WAS AMENDED BY A SUPPLEMENTARY DEED. REFERRING TO THE ORDER OF THE CIT(APPEALS), MORE PARTICULARLY PARA 8.4, THE LD. D.R. SUBMITTED THAT THE SUPPLEMENTARY DEED WAS EXECUTED ON 01.04.2009, WHER EAS, THE STAMP PAPER ITSELF WAS PURCHASED ON 03.04.2009. TH IS SHOWS THAT THE ASSESSEE HAS CREATED THE DOCUMENT FOR THE PURPO SE OF MAKING A FALSE CLAIM BEFORE THE INCOME-TAX AUTHORITIES. THI S FALSE DOCUMENT SUBMITTED BY THE ASSESSEE FOR THE PURPOSE OF MAKING FALSE CLAIM TO THE EXTENT OF ` 4,60,000/- CANNOT BE A BASIS FOR GRANTING RELIEF TO THE ASSESSEE. IF THE INTENTION OF THE ASSESSEE IS REAL LY TO PAY MORE REMUNERATION TO THE PARTNERS, THE PARTNERSHIP DEED WOULD HAVE BEEN AMENDED BY EXECUTING AN ABSOLUTE DEED IN A MANNER K NOWN TO LAW. UNFORTUNATELY, ACCORDING TO THE LD. D.R., THE ASSES SEE COULD NOT DO SO. THE ASSESSEE NOW CREATED A FALSE DOCUMENT TO S UPPORT THE FALSE CLAIM. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE SUPPLEMENTARY DEED DATED 01.04.2009 CANNOT BE EXECUTED ON THE STAMP PAPER DATED 03.04.2 009. 4 I.T.A. NO.1447/MDS/16 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ORIGINAL PARTNERSHIP DEED ENABLES THE PAYMENT OF ` 3,60,000/- TOWARDS PARTNERS REMUNERATION. IN FACT, THE ASSESSEE HAS P AID ` 4,60,000/- OVER AND ABOVE ` 3,60,000/-. THE ASSESSEE HAS NOW PRODUCED A COPY OF THE SO-CALLED SUPPLEMENTARY DEED WHICH SAID TO BE ENABLE THE ASSESSEE-FIRM FOR PAYMENT OF ` 34,175/- PER MONTH. WE HAVE CAREFULLY GONE THROUGH THE COPY OF THE SO-CALLED SU PPLEMENTARY PARTNERSHIP DEED. THE STAMP PAPER WAS DATED 03.04. 2009 AND THE DOCUMENT WAS EXECUTED ON 01.04.2009, AS RIGHTLY OBS ERVED BY THE CIT(APPEALS). IN OTHER WORDS, THE STAMP PAPER CAME INTO EXISTENCE ONLY ON 03.04.2009, WHEREAS THE DOCUMENT APPEARS TO HAVE BEEN EXECUTED ON 01.04.2009. THE LD.COUNSEL FOR THE ASS ESSEE NOW CLAIMS THAT IT IS ONLY A TYPOGRAPHICAL ERROR. THIS TRIBUNAL IS UNABLE TO ACCEPT THE SUBMISSION OF THE LD.COUNSEL FOR THE ASS ESSEE. THIS IS APPARENTLY A DOCUMENT CREATED FOR THE PURPOSE OF MA KING FALSE CLAIMING BEFORE THE LOWER AUTHORITIES. AFTER THE A SSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE BY REFERRING T O ORIGINAL PARTNERSHIP DEED, THE ASSESSEE CREATED THIS DOCUMEN T TO SUPPORT THE FALSE CLAIM. IT IS NOT A MERE TYPOGRAPHICAL ER ROR AS CONTENDED BY 5 I.T.A. NO.1447/MDS/16 THE LD.COUNSEL FOR THE ASSESSEE. HENCE, THE SO-CAL LED SUPPLEMENTARY DEED CANNOT BE ACTED UPON. THEREFORE , THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 15 TH SEPTEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 15 TH SEPTEMBER, 2016. KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-12, CHENNAI 4. PRINCIPAL CIT-3 5. 8; /3 /DR 6. * < /GF.