National Advertising Agency , Kolkata V. DCIT, Circle - 32, , Kolkata

ITA 2094/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0285 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Assessee Lawyers: P K ROY
• Keywords: Set aside
• Section: 143(3); 40(b)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI A. T. VARKEY, JM &DR. A.L.SAINI, AM ./ITA NO.2094/KOL/2018 ( / ASSESSMENT YEAR: 2013-14) NATIONAL ADVERTISING AGENCY 18, ROWDON STREET, KOLKATA- 700017 VS. DCIT, CIRCLE-32, KOLKATA ./ ./PAN/GIR NO.: AAFFN 8566 M (ASSESSEE) .. (REVENUE) ASSESSEE BY : SHRI P. K. ROY, ADVOCATE RESPONDENT BY : SHRI RADHEY SHYAM, CIT DR / DATE OF HEARING : 22/04/2019 /DATE OF PRONOUNCEMENT : 28/06/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE ASSESSEE , PER TAINING TO ASSESSMENT YEAR 2013-14, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-9, KOLKATA, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) DATED 22/03/2016. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED A MULTIP LE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE I NFORMS THE BENCH THAT THE ASSESSEE DOES NOT WANT TO PRESS GROUND NO. 3 AND 4 THEREFORE WE DISMISS GROUND NOS. 3 AND 4 AS NOT PRESSED. 3. APPEAL FILED BY THE ASSESSEE FOR A.Y. 2013-14 IS BARRED BY LIMITATION BY 13 DAYS. THE ASSESSEE MOVED A PETITION FOR CONDONATION OF DELAY. WE HAVE HEARD BOTH THE PARTIES ON THIS PRELIMINARY ISSUE AND HAVING RE GARD TO THE REASONS GIVEN IN THE NATIONAL ADVERTISING AGENCY ITA NO.2094/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 2 22 2 PETITION FOR CONDONATION OF DELAY, WE CONDONE THE D ELAY AND ADMIT ASSESSEES APPEAL FOR HEARING. 4. NOW WE SHALL TAKE GROUND NO. 2 RAISED BY THE ASS ESSEE WHICH RELATES TO DISALLOWANCE OF PARTNERS SALARY U/S 40(B)(V) OF TH E ACT. AT THE OUTSET ITSELF, THE LD. COUNSEL SUBMITTED BEFORE THE BENCH THAT THE ASSESSE E FURNISHED THE COMPUTATION OF TAXABLE INCOME AND BOOKS DURING THE ASSESSMENT PROC EEDINGS U/S 143(3) OF THE ACT. THE LD. ASSESSING OFFICER WITHOUT TAKING INTO ACCOUNT THE PARTNERSHIP DEED DISALLOWED THE MONTHLY REMUNERATION OF PARTNERS IN TERMS OF SECTION 40(B)(V) OF THE ACT. WHEN THE PARTNERSHIP FARM PAID SALARY AS P ER PARTNERSHIP DEED AND WHEN THE TOTAL SALARY PAID TO THE PARTNERS WERE WITHIN P ERMISSIBLE LIMIT OF SECTION 40(B)(V) OF THE ACT THEN THERE SHOULD NOT BE ANY DI SALLOWANCE UNDER SECTION 40(B)(V) OF THE ACT. THE LD. ASSESSING OFFICER OUGH T TO ALLOW SALARY EXPENSES OF PARTNERS AS PER THE PROVISION OF THE ACT. THE LD. D R FOR THE REVENUE HAS FULLY AGREED WITH THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE THAT IN SPITE OF HAVING PARTNERSHIP DEED THE ASSESSING OFFICER DI D NOT ALLOW THE MONTHLY PAYMENT OF SALARY / REMUNERATION TO PARTNERS AS PER THE PROVISIONS MADE IN PARTNERSHIP DEED. WE ARE OF THE VIEW THAT THIS ISSU E SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE PARTNE RSHIP DEED AND ALLOW THE PARTNERS SALARY AS PER PROVISION OF SECTION 40(B) (V) OF THE ACT. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE IS SUE BACK TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE THE ISSUE TAKING IN TO THE PARTNERSHIP DEED AND IN ACCORDANCE WITH LAW. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 28.06.2019 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 28/06/2019 ( SB, SR.PS ) NATIONAL ADVERTISING AGENCY ITA NO.2094/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 3 33 3 COPY OF THE ORDER FORWARDED TO: 1. NATIONAL ADVERTISING AGENCY 2. DCIT, CIRCLE-32, KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES