ACIT, CHENNAI V. Price Waterhouse & Co., CHENNAI

ITA 248/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4398 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 27-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: K PRASANNA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !', $ %& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ ITA NO.248/MDS/2017 ) *) / ASSESSMENT YEAR : 2010-11 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 3, CHENNAI - 600 034. V. M/S PRICE WATERHOUSE & CO., 8 TH FLOOR, PRESTIGE PALLADIUM BAYAN, 129-140, GREAMS ROAD, CHENNAI - 600 006. PAN : AAAFP 8828 M (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT ./,- 0 1 / RESPONDENT BY : SHRI K. PRASANNA, CA 2 0 3$ / DATE OF HEARING : 21.03.2017 4!* 0 3$ / DATE OF PRONOUNCEMENT : 07.06.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI , DATED 31.10.2016 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF PARTNERS REMUNERATION. 2 I.T.A. NO.248/MDS/17 3. SHRI SHIVA SRINIVAS, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED PARTNERS REMUN ERATION BY VIRTUE OF SUPPLEMENTARY DEED DATED 23.09.2010. THE SUPPLEMENTARY DEED ITSELF WAS EXECUTED ONLY ON 23.0 9.2010, THEREFORE, THE ASSESSING OFFICER FOUND THAT THE REM UNERATION TO PARTNERS CANNOT BE ALLOWED FROM 01.04.2009 TO 31.03 .2010. ACCORDINGLY, THE CLAIM OF THE ASSESSEE TO THE EXTEN T OF ` 1,24,80,000/- WAS DISALLOWED. HOWEVER, ACCORDING T O THE LD. D.R., ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) DIRECTE D THE ASSESSING OFFICER TO ALLOW THE PARTNERS REMUNERATI ON WITH EFFECT FROM THE DATE OF EXECUTION OF RELEVANT DEED. ACCOR DING TO THE LD. D.R., THE SUPPLEMENTARY DEED WAS EXECUTED ON 23.09. 2010 WHICH FALLS IN THE FINANCIAL YEAR 2010-11 AND RELEVANT AS SESSMENT YEAR IS 2011-12. THE YEAR UNDER CONSIDERATION IS ASSESSMEN T YEAR 2010- 11, THEREFORE, ACCORDING TO THE LD. D.R., IT CANNOT BE ALLOWED DURING THE YEAR UNDER CONSIDERATION. 4. ON THE CONTRARY, SHRI K. PRASANNA, THE LD. REPRE SENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE CIT(APPEALS) DIREC TED THE ASSESSING OFFICER TO ALLOW THE PAYMENT OF REMUNERAT ION TO WORKING PARTNERS ON THE BASIS OF SUPPLEMENTARY PARTNERSHIP DEED DATED 3 I.T.A. NO.248/MDS/17 23.09.2010 FROM THE DATE OF EXECUTION OF RELEVANT D EED. THEREFORE, THE REVENUE CANNOT HAVE ANY GRIEVANCE AT ALL. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE PAYMENT OF REMUNERATION TO WORKING PARTNERS WAS BASED UPON THE SUPPLEMENTARY PARTNERSHIP DEED EXECUTED ON 23.09.20 10. IT IS NOT IN DISPUTE THAT THE SUPPLEMENTARY PARTNERSHIP DEED WAS EXECUTED IN THE FINANCIAL YEAR 2010-11 WHICH FALLS IN THE ASSES SMENT YEAR 2011- 12. THE CIT(APPEALS) AFTER CONSIDERING THE SUPPLEM ENTARY PARTNERSHIP DEED, AT PARA 41 OF HIS ORDER, DIRECTED THE ASSESSING OFFICER AS FOLLOWS:- 41. HENCE, IN VIEW OF THE ABOVE OBSERVATIONS OF THE UNDERSIGNED, THE A.O. IS DIRECTED TO ALLOW THE PAYM ENT OF REMUNERATION TO THE WORKING PARTNERS AS EVIDENCED I N THE SUPPLEMENTARY PARTNERSHIP DEED EXECUTED ON 23/09/2010 ALLOWABLE W.E.F. THE DATE OF EXECUTION OF RELEVANT DEED. THEREFORE, THE DIRECTION OF THE CIT(APPEALS) IS TO ALLOW THE PARTNERS REMUNERATION ONLY FROM THE DATE OF EXECUTION OF REL EVANT DEED. IF THE DATE OF EXECUTION OF RELEVANT DEED FALLS IN ASS ESSMENT YEAR 2011-12, IT CANNOT BE ALLOWED DURING THE YEAR UNDER CONSIDERATION. 4 I.T.A. NO.248/MDS/17 THEREFORE, THE CLAIM OF THE ASSESSEE CANNOT BE ALLO WED DURING THE YEAR UNDER CONSIDERATION. 6. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE STANDS ALLOWED. ORDER PRONOUNCED ON 7 TH JUNE, 2017 AT CHENNAI. SD/- SD/- ( !' ) ( . . . ) (SANJAY ARORA) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 7 TH JUNE, 2017. KRI. 0 .378 98*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 :3 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 8; .3 /DR 6. ) < /GF.