Kani Ram Banwari Lal, SRIGANGANAGAR V. ITO, SRIGANGANAGAR

ITA 146/JODH/2013

• Counselvise Citation: 14623314 RSA 2013
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-08-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NO.146/JODH/2013 ASSESSMENT YEAR:2009-10 PAN NO. AABFK3336L M/S KANI RAM BANWARI LAL, VS. THE COMMISSIONER OF INCOME TAX SHOP NO. 97, NEW DHAN MANDI (APPEALS) BIKANER. SRIGANGANAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KISHAN GOYAL RESPONDENT BY : SHRI G.R. KOKANI DATE OF HEARING : 06/08/2013 DATE OF PRONOUNCEMENT : 07/08/2013 ORDER PER N. K. SAINI: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 01/01/2013 OF LD. CIT(APPEALS)-BIKANER. THE ONLY GROUND RAISED IN THIS APPEAL READS AS UNDER:- 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APP ALS), BIKANER HAS ERRED IN THE LAW AND FACTS IN CONFIRMING THE DISALL OWANCE OF REMUNERATION PAID TO THE WORKING PARTNERS OF THE FI RM IN THEIR REPRESENTATIVE CAPACITY OF RESPECTIVE HUF UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSIN G OFFICER DISALLOWED RS. 58,655/- BEING REMUNERATION PAID TO THE WORKING PAR TNERS AND CLAIMED DEDUCTIBLE U/S 40(B) OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT) BY OBSERVING THAT THE PARTNERSHIP DEED DATED 03/4/2007 HAD DISCLOSED FOUR PARTNERS IN INDIVIDUAL CAPACITY WHEREAS BOOKS OF ACCOUNT REF LECTED STATUS OF TWO PARTNERS 2 AS OF HUF. REFERENCE TO EARLIER DEEDS OF PARTNERSHI P SHOWING SHRI PURUSHOTTAM DAS LILA HUF AND SHRI KRISHAN LILA HUF CONSISTENTLY AS PARTNERS WAS HELD TO BE IRRELEVANT BY THE ASSESSING OFFICER, WHO ACCORDINGL Y DISALLOWED THE REMUNERATION OF RS. 42,437/- AND RS. 16,280/- TOTALLING OF RS. 5 8,655/- GIVEN TO THE PARTNERS SHRI PURUSHOTTAM DAS LILA HUF AND SHRI KRISHAN LILA HUF RESPECTIVELY. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE FIRM HAD BEEN CONTINUIN G FROM 18/11/1989 WHERE SHRI PURUSHOTTAM DAS LILA AND SHRI KRISHAN LILA REP RESENTING HUF AS KARTA JOINED IT BY INVESTING HUF FUNDS AND SINCE THEN IT HAD BEEN UNINTERRUPTEDLY ASSESSED AS SUCH AND THAT THE SHARE OF PROFITS AND REMUNERATIONS GIVEN AS PER DEED OF PARTNERSHIP WERE CREDITED TO HUF ACCOUNTS AND SAME WERE ASSESSED IN THE HANDS OF RESPECTIVE HUF. HOWEVER, THE LEARNED C IT(A) DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND CONFIRMED THE A CTION OF THE ASSESSING OFFICER. RELIANCE WAS PLACED ON THE JUDGMENT OF HON 'BLE SUPREME COURT IN THE CASE OF M/S RASIK LAL & CO. VS. CIT (229 ITR 458 S C). NOW THE ASSESSEE IS IN APPEAL. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SALARY PAID TO THE WORKING PARTNERS AS KARTA OF HUF WAS ALLOWABLE AND THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUN AL DATED 07/7/2004 PASSED IN I.T.A. NO. 660/JAIPUR/1996 FOR THE ASSESSMENT YEAR 1993-94 IN THE CASE OF INCOME TAX OFFICER, WARD-1, SRIGANGANAGAR VS. M/S N IYAMAT RAI PYARELAL, SRIKARANPUR. COPY OF THE SAID ORDER WAS FURNISHED. 3 5. IN THIS RIVAL SUBMISSIONS, THE LEARNED D.R. SUPP ORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT THIS ISSUE IS COVERED BY THE EARLIER DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER, WARD-1, SRIGANGANAGAR VS. M/S NIYAMAT RAI PYARELAL, SRIKARANPUR (SUPRA) WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 4, WHICH READ AS UNDER:- 4. HEARD THE LEARNED D.R. AND CAREFULLY CONSIDERED HIS SUBMISSIONS WE FIND THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE AND AGAINST THE REVENUE BY AFORESAID DECISION DATED 22.08,.2003 IN THE CASE OF INCOME TAX OFFICER WARD-1, SRIGANGANAGAR VS. M/S CHUNILAL PREM PRAKASH, GANGANAGAR, WHERE THE TRIBUNAL HAS HELD AS UNDER:- AT THE VERY OUTSET THE LEARNED COUNSEL FOR THE AS SESSEE SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISIONS OF THE TRIBUNAL REPORTED IN THE CASE OF ACIT V. PATEL QUARRY (121 TAXMAN 362 (AHD. ) (MAG) AND SMRUTI TRADING COMPANY VS. INCOME TAX OFFICER (2001) 70 T TJ 9MUMBAI) 114, WHICH HAS FOLLOWED THE DECISION OF THE HON'BLE SUP REME COURT IN THE CASE OF BRIJMOHANDAS LAXMANDAS V. CIT (1997) 138 CTR (SC) 214 AND SINCE THE ORDER OF THE LEARNED DCIT(A) IS IN ACCOR DANCE WITH THESE PRECEDENTS, THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. IT WAS URGED FOR DISMISSAL OF THE REVENUES APPEAL THE LEARNED D.R. RELIED UPON THE ORDERS OF THE AS SESSING OFFICER AND PLEADED FOR RESTORATION OF THE SAME. AFTER HEARING THE RIVAL SUBMISSIONS AND CONSIDERI NG THE MATERIAL PLACED ON RECORD, I FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE PRECEDENTS REFERRED TO ABOVE. THEREFORE, FO LLOWING THE SAID PRECEDENT, I UPHOLD THE ORDER OF THE LEARNED DCIT( A) AND DISMISS THE APPEAL OF THE REVENUE. RESPECTFULLY FOLLOWING THE ABOVE MENTIONED ORDER O F THE TRIBUNAL, WE CONFIRM THE ORDER OF DCIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 4 7. SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE AFORESAID REFERRED TO CASE AND THE RATIO LAID DOWN BY THE HON 'BLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GOLDEN TOUC H REPORTED IN (2003) 263 ITR 261 (MAD) WHEREIN IT HAS BEEN HELD AS UNDER:- THE REMUNERATION PAID TO THE INDIVIDUAL PARTNERS W HO ARE WORKING PARTNERS IS NOT TO BE DISALLOWED ON THE SOLD GROUND THAT SUCH PARTNERS WERE NOMINEES OF THEIR HINDU UNDIVIDED FAMILIES. EV EN AS THE HINDU UNDIVIDED FAMILY CANNOT CLAIM THAT REMUNERATION PAI D TO THE PARTNERS REPRESENTING IT IS REMUNERATION PAID TO THE HINDU U NDIVIDED FAMILY, SO ALSO THE ASSESSING OFFICER CANNOT REGARD THE REMUNERATIO N PAID TO SUCH PARTNER, WHO IS ALSO A WORKING PARTNER, AS REMUNERA TION PAID TO THE HINDU UNDIVIDED FAMILY FOR THE PURPOSE OF DISALLOWANCE UN DER SECTION 40(B) OF THE INCOME-TAX ACT, 1961. SO, RESPECTFULLY FOLLOWING THE ORDER DATED 07/07/20 04 IN I.T.A. NO. 660/JAIPUR/1996 FOR THE ASSESSMENT YEAR 1993-94 IN THE CASE OF INCOME TAX OFFICER, WARD-1, SRIGANGANAGAR VS. M/S NIYAMAT RAI PYARELAL, SRIKARANPUR AND THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN TH E CASE OF COMMISSIONER OF INCOME TAX VS. GOLDEN TOUCH (SUPRA), WE FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) IS DELETED. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/2013) . SD/- SD/- (HARI OM MARATHA) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07/08/2013 *RANJAN 5 COPY FORWARDED TO: 1. APPELLANT- M/S KANI RAM BANWARI LAL, SRIGANGANAGAR. 2. RESPONDENT- COMMISSIONER OF INCOME TAX (A), BIKA NER. 3. CIT(A) 4. CIT 5. D.R. 6. THE GUARD FILE (ITA NO. 146/JODH/2013. ASSISTANT REGISTRAR ITAT, JODHPUR.