M/s Kumar & Brothers, V. I.T.O.,

ITA 275/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0428 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 29-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAON
• Assessee Lawyers: ANAND PASARI
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH, RANCHI BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 275/RAN/2014 (ASST. YEAR : 2006-07) M/S. KUMAR & BROTHERS, C/O SRI SANJAY KUMAR, MAIN ROAD, CHAINPUR, RANCHI. VS. ITO, WARD-3(2), RANCHI. PAN NO. AAGFK 9680 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANAND PASARI ADV. DEPARTMENT BY : SHRI CHOUDHARY ORAON - DR DATE OF HEARING : 02/11/2015. DATE OF PRONOUNCEMENT : 02/11/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RANCHI, DATED 24/06/2014. 2. THE GROUND NOS. 1 TO 12 ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN NOT ALLOWING THE DEDUCTION FOR PAYMENT OF INTEREST AND SALARY TO THE PARTNERS OF RS. 1,65,000/-. 3 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE O RDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSES SEE CLAIMED DEDUCTION OF INTEREST AND SALARY PAID TO THE PARTNE RS IN ITS COMPUTATION 2 ITA NO. 275/RAN/2014 OF TOTAL INCOME OF RS. 1,65,000/-, OUT OF TOTAL INC OME OF RS. 1,77,220/-. IN ABSENCE OF ANY COMPLIANCE AND DETAILS BEING FILE D BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER DISALLOWED INTEREST OF RS.45,000/- PAID TO THE PARTNERS AND SALARY OF RS. 1,20,000/- PAID TO THE PARTNERS AND ADDED THE SAME TO THE INCOME OF TH E ASSESSEE. 4. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CO NFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT T HE ASSESSING OFFICER HAD MADE THE EX-PARTE ORDER UNDER SECTION 144 OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT COPY OF PARTNERSHIP DEED WA S REQUIRED VIDE NOTICE UNDER SECTION 142(1) AND SUBSEQUENT LETTER W AS NOT PRODUCED AND IN THE EX-PARTE ORDER, SO PASSED, DEDUCTION ON ACCOUNT OF INTEREST ON CAPITAL ON THE PARTNERS AMOUNTING TO RS. 45,000/ - AND SALARY TO THE PARTNERS AMOUNTING TO RS. 1,20,000/-, TOTALLING TO RS. 1,65,000/- WAS DENIED. THE COMMISSIONER OF INCOME TAX (APPEALS) N OTED THAT ACCORDING TO THE PROVISIONS OF SEC. 184(5) OF THE A CT WHICH PROVIDES THAT NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PR OVISION OF THIS ACT, WHERE, IN RESPECT OF ANY ASSESSMENT YEAR, THERE IS ON THE PART OF A FIRM ANY SUCH FAILURE AS IS MENTIONED IN SEC. 144, THE F IRM SHALL BE SO ASSESSED THAT NO DEDUCTION BY WAY OF ANY PAYMENT OF INTEREST, SALARY, BONUS, COMMISSION OR REMUNERATION, BY WHATEVER NAME CALLED, MADE BY SUCH FIRM TO ANY PARTNER OF SUCH FIRM SHALL BE ALLO WED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFIT AND GAINS O F BUSINESS OR PROFESSION AND SUCH INTEREST, SALARY, BONUS, COMMIS SION OR REMUNERATION SHALL NOT BE CHARGEABLE TO INCOME TAX UNDER CLAUSE (V) OF SEC. 28. 5. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SIMPLY R EITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 6 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SU PPORTED THE ORDERS OF THE LOWER AUTHORITIES. 3 ITA NO. 275/RAN/2014 7 . WE FIND THAT THE ASSESSMENT, IN THE INSTANT CASE CAME TO BE MADE UNDER SECTION 144 OF THE ACT AS THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT AND R EQUIRED THE ASSESSEE TO FILE THE PARTNERSHIP DEED. THE AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE COULD NOT CONTROVERT THE FINDING OF THE AS SESSING OFFICER THAT THE ASSESSEE FAILED TO COMPLY WITH THE NOTICES OF T HE ASSESSING OFFICER AND FILE THE NECESSARY DETAILS REQUIRED BY HIM. TH EREFORE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDERS OF THE LOW ER AUTHORITIES, HENCE, WE DISMISS THE GROUND OF APPEAL OF THE ASSESSEE. 8 . GROUND NO.13 OF THE APPEAL IS DIRECTED AGAINST TH E ORDER OF THE ASSESSING OFFICER CHARGING INTEREST UNDER SECTION 2 34B & 234C OF THE ACT. 9. AT THE TIME OF HEARING, NO SUBMISSIONS WERE MADE BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE OF THE AS SESSEE HENCE, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED FOR W ANT OF PROSECUTION. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON MONDAY, THE 2 ND DAY OF NOVEMBER, 2015 AT RANCHI. SD/- SD/- (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 02 ND NOVEMBER, 2015. VR/- 4 ITA NO. 275/RAN/2014 COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., RANCHI 5 ITA NO. 275/RAN/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 02/11/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 03/11/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 03/11/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 03/11/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 03/11/2015 SR.PS 6. DATE OF PRONOUNCEMENT 02/11/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 03/11/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER