ITO, Ward-56(4), Kolkata V. M/s. Angels Alluminium Corporation, Kolkata

ITA 1667/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2692 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 23-09-2009
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANIK
• Assessee Lawyers: R SALARPURIA
• Keywords: Opportunity of being heard; Set aside
• Section: 40(b); 263

Judgement Text

INCOME TAX APPELLATE TRIBUNAL C BENCH, KOLKA TA (BEFORE HONBLE SMT. DIVA SINGH, JM & SHRI B.C.MEEN A,AM) I.T.A.NO.1667/KOL/2009 ASSESSMENT YEAR : 2005-06 I.T.O., WARD-56(4) -VS- M/S. ANGELS ALUMINIUM CORPN . KOLKATA KOLKATA PAN:AAEFA 5098C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K.PRAMANIK RESPONDENT BY : SHRI R.SALARPURIA O R D E R PER SMT. DIVA SINGH, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 25.06.2009 OF THE CIT-(A)-XXXVI, KOLKATA PERTAINING TO 2005-06 A. YR. WHEREIN THE FOLLOWING GROUND HAS BEEN RAISED BY THE REVENUE :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME- TAX (APPEALS)-XXXVI, KOLKATA HAS ERRED IN ALLOWING THE REMUNERATION AND INTEREST ON CAPITAL TO THE PARTNERS OF RS.120,000/- AND RS.947,487/- RESPECTIVELY U/S 40(B) IN CONTRAVENTION TO PROVISIO NS UNDER SECTION 184)5) OF THE I.T.ACT. 2. THE RELEVANT FACTS ARE THAT THE AO WAS CONST RAINED TO PASS 144 ORDER HOLDING THAT THERE WAS REPEATED NON-COMPLIANCE TO STATUTORY NOTI CES. ACCORDINGLY HE DISALLOWED THE CLAIM THE AMOUNT OF RS.1,20,000/- AND RS.9,47,487/- AS REMUNERATION AND INTEREST ON CAPITAL TO THE PARTNERS RESPECTIVELY U/S 40(B) OF T HE IT ACT. 2.1. IN APPEAL BEFORE THE FIRST APPELLATE AUTHOR ITY THE LD. CIT(A) HAS DECIDED THE ISSUE AS UNDER :- THEY HAVE ALSO FURNISHED COPIES OF ORIGINAL AND AM ENDED PARTNERSHIP DEEDS DT. 27 TH JUNE, 2001 AND 8 TH JULY, 2004. I HAVE CAREFULLY CONSIDERED THE ABOVE. THE PARTNERS HIP DEED OF DT.27 TH JUNE, 2001 HAS PROVIDED FOR INTEREST ON CAPITAL AT 18% WH ILE THE AMENDED PARTNERSHIP DEED, DT. 8 TH JULY, 2004 HAS PROVIDED FOR PAYMENT OF SALARY TO W ORKING PARTNERS 2 AT RS.1,20,000/- FOR THE PERIOD ENDED ON 31 ST MARCH, 2005 AND FROM 1.4.2005 ONWARDS AT RS.10,000/- PER MONTH PER PERSON. IN VIE W OF THE ABOVE, THERE IS NO JUSTIFICATION FOR ASSESSING OFFICER TO DISALLOW OF RS.1,20,000/- AND RS.9,47,487/- TOWARDS REMUNERATIONS AND INTEREST PA ID TO PARTNERS. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE REMU NERATION AND INTEREST ON CAPITAL TO THE PARTNERS AS PER SEC.40(B) OF THE IT ACT. 2.2. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE PARTIES BEFORE THE BENCH . ON A CAREFUL CONSIDERATION OF THE MATERIAL AVAILABLE ON RECORD IT IS CONSIDERED APPRO PRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE SAM E IN ACCORDANCE WITH LAW BY WAY OF A SPEAKING ORDER. IN THE COURSE OF HEARING IT WAS S UBMITTED BY THE LD. AR THAT THE LD. CIT(A) (ADMN.) HAS PROCEEDED U/S 263 AND THEREAFTER THE ISSUE HAS BEEN SET ASIDE TO THE FILE OF THE AO. ACCORDINGLY IN THE AFOREMENTION ED FACTS AND CIRCUMSTANCES THE DEPARTMENTAL APPEAL IS ALLOWED FOR STATISTICAL PURP OSED. NEEDLESS TO SAY THAT THE ASSESSEE SHALL BE AFFORDED A REASONABLE OPPORTUNITY OF BEING HEARD 4. IN THE RESULT THE APPEAL OF THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES AS PER THE PRONOUNCEMENT MADE IN THE OPEN COURT ON THE DAT E OF HEARING ITSELF I.E. 01.04.2010. . SD/- SD/- (B.C.MEENA) (DIVA SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01.04.2010. COPY OF THE ORDER IS FORWARDED TO :- 1. M/S. ANGELS ALLUMINIUM CORPORATION, 19, BIRTISH INDIA STREET, KOLKATA-700069. 2. I.T.O., WARD-56(4), KOLKATA 3. C.I.T.(APPEALS)-XXXVI, KOLKATA 4) C.I.T. KO LKATA 5. D.R., ITAT, KOLKATA BY ORDER ASSISTANT REGISTRAR I.T.A.T., KOLKATA R.G./P.S. TRUE COPY 3