Laxmi Plastic, Delhi V. ITO, Ward-37(3), New Delhi

ITA 2850/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6777 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 23-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Business income
• Section: 154; 143(1); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 2850 / DEL/ 2018 ASSESSMENT YEAR:2015-16 M/S LAXMI PLASTIC, G - 969, DSIDC, INDUSTRIAL COMPLEX, NARELA, DELHI-110040 ASSESSMENT YEAR: 2015- 16 ITO, WARD - 37(3) , I.P. ESTATE, NEW DELHI TAN/PAN: AAAFL7107K (APP ELL ANT) (RESPONDENT) A PP ELL ANT BY: SH. R.S. SINGHVI, CA, SH. SATYAJEET GOEL, CA RESPONDENT BY: SH. SURENDER PAL, SR. DR DATE OF HEARING: 2 4 09 2018 DATE OF PRONOUNCEMENT: 21 12 20 1 8 O R D E R AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 28.2.2018 PASSED B Y LD. CIT(A)-13, NEW DELHI FOR THE ASSESSMENT YEAR 2015-1 6. ON VARIOUS GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLEN GED THE ADJUSTMENT MADE IN INTIMATION U/S 143(1) AND REJECT ION OF CLAIM OF INTEREST ON PARTNER CAPITAL OF RS. 2,38,82 5/-. 2. THE FACTS IN BRIEF ARE THAT THE APPELLANT IS A PARTNERSHIP FIRM ENGAGED IN MANUFACTURING CUM-TRADI NG IN PLASTIC GOODS. IT HAS FOUR PARTNERS WHO WERE ENTITL ED TO INTEREST ON THEIR CAPITAL AS PER THE APPLICABLE RAT E AS ITA NO. 2850/DEL/2018 2 PRESCRIBED U/S 40(B)(IV) OF THE ACT. THE APPELLANT FILED ITS I.T. RETURN FOR THE ASSESSMENT YEAR 2015-16 DECLARING NE T TAXABLE INCOME AT RS. 610/- AFTER CLAIMING DEDUCTION OF INT EREST PAID TO PARTNERS OF RS. 2,38,825/- AS PER DETAIL GIVEN B ELOW:- NAME OF THE PARTNER AMT/RS. I. SH. GULSHAN KUMAR SACHDEVA 32717/- II. RAM DEV SACHDEVA 18564/- III. SHANTA SACHDEVA 94891/ - IV. SANGEETA SACHDEVA 92653/- THE APPELLANT PAID INTEREST TO PARTNERS @ OF 12% ON THE CAPITAL BALANCE STANDING CREDIT TO THE RESPECTIVE C APITAL ACCOUNTS AS ALLOWABLE PROVISION U/S 40(B)(IV) OF TH E ACT. THE AO CPC, BANGALORE HAD ASSESSED THE BUSINESS INCOME OF RS. 2,38,825/- VIDE INTIMATION DATED 7.9.2015. HOWEVER, THE CLAIM OF DEDUCTION OF INTEREST OF RS. 2,38,825/- PA ID TO THE PARTNERS ON CAPITAL ACCOUNT HAS BEEN DISALLOWED. TH E LEARNED CIT(A) HAS DISCUSSED THE FACTS IN THE FOLLOWING MAN NER:- 4.3 THE HARD COPY OF APPELLANTS RETURN WAS CALLED . VIDE LETTER DATED 19.02.2018 (RECEIVED IN DAK ON TH E SAME DATE), THE APPELLANT CONTENDED THAT IT CLAIMED DEDUCTION OF RE MUNERATION PAID TO PARTNERS (OF RS. 2,45,679/-), AS PER COLUMN NO. 38 OF SCHEDULE P&L, OF THE ROL AS PER DETAIL GIVEN BELOW:- INTEREST RS. 2,38,825/- REMUNERATION RS. 6,854/- TOTAL RS. 2,45,679/- 4.4. A PERUSAL OF COLUMN NO. 38 SHOWS THAT APPELLA NT HAS INDEED CLAIMED THIS AMOUNT OF RS. 2,45,679/-. H OWEVER, THE DESCRIPTION OF THIS COLUMN NO. 38 SHOWS THAT IT IS TOTAL OF COLUMN (8) OF ITEM-E OF PARTNERS/MEMBERS INFORMATION UNDER PA RT-A-GEN. A PERUSAL OF ITEM-E OF PARTNERS/MEMBERS INFORMATION UNDER PART-A- GEN SHOWS THAT THE APPELLANT HAS SHOWN REMUNERATION OF RS. ITA NO. 2850/DEL/2018 3 3427/- EACH TO I) SH. GULSHAN KUMAR SACHDEVA AND II ) SH. RAMDEV SACHDEVA. A PERUSAL OF ITEM-E OF PARTNERS/MEMBERS INFORMATION UNDER PART-A-GEN ALSO SHOWS THAT THE RATE OF INTERE ST ON CAPITAL HAS BEEN SHOWN AT 0.00. THEREFORE, WHILE PROCESSING THE ROL, THE CPC HAS CORRECTED THE FIGURE OF RS. 2,45,679/- IN COLUM N NO. 38 OF SCHEDULE P&L TO RS. 6,854/- (BEING TOTAL OF COLUMN (8) OF ITEM-E OF PARTNERS/MEMBERS INFORMATION UNDER PART-A-GEN.). 4.5 THEREFORE, THE CPC HAS MADE ADJUSTMENT OF ARITH METICAL MISTAKE WHICH IS VERY MUCH WITHIN THE SCOPE OF 143( 1). IT IS THE APPELLANT WHO HAS FILLED UP FIGURES IN ITEM-E OF PA RTNERS/MEMBERS INFORMATION UNDER PART-A-GEN WHICH CAN BE CORRECTED ONLY BY WAY OF REVISED ROL WHICH IS NOT POSSIBLE IN THE PRESENT CA SE BECAUSE AS PER THE INTIMATION THE ROL WAS FILED U/S 139(4). 3. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ITR, WHICH HAS BEEN PLACED IN THE PAPER BOOK AT FRO M PAGES 4 TO 32, IT IS SEEN THAT IN ITEM NO. 38, THE ASSESSEE HAD SHOWN SALARY REMUNERATION AT RS. 2,45,679/- AND IN THE CO LUMN OF INTEREST PAID TO THE PARTNERS, IT HAS BEEN SHOWN AT NIL. IT APPEARS THAT ASSESSEE HAS CLUBBED REMUNERATION AMOU NT OF RS. 6,854/- AND INTEREST PAID TO THE PARTNERS OF RS . 2,38,825/- WRONGLY IN ITEM NO. 38 INSTEAD OF SHOWIN G OF INTEREST IN ITEM NO. 44. 4. FURTHER ON PERUSAL OF PROFIT AND LOSS ACCOUNT, I T IS SEEN THAT ASSESSEE HAD MADE PAYMENT OF INTEREST TO THE PARTNERS OF RS. 2,38,825/- AND REMUNERATION OF RS. 6,854/- AND IN THE COMPUTATION OF INCOME SUCH AN INTEREST I NCOME HAS BEEN DEDUCTED. THUS, IT APPEARS THAT IT WAS A B ONA FIDE MISTAKE WHILE DISCLOSING THE INTEREST PAID IN A DIF FERENT ITEM THE RETURN OF INCOME. THE CLAIM WHICH IS OTHERWISE ALLOWABLE UNDER THE ACT HAS TO BE ALLOWED IN ACCORDANCE WITH LAW; AND ITA NO. 2850/DEL/2018 4 WHEN ASSESSEE HAD MOVED AN APPLICATION U/S 154 BEFO RE THE ASSESSING OFFICER, THEN SAME SHOULD HAVE BEEN RECTI FIED. THUS, I HOLD THAT SUCH A DISALLOWANCE COULD NOT HAV E BEEN MADE ESPECIFICALLY WHEN ASSESSEE HAD MOVED A RECTIF ICATION APPLICATION BEFORE THE AO SEEKING RECTIFICATION OF AMOUNT WHICH IS OTHERWISE ALLOWABLE UNDER THE STATUTE WHIL E COMPUTING THE INCOME OF THE FIRM. THUS GROUNDS RAIS ED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2018 . SD/- [ AMIT SHUKLA ] JUDICIAL MEMBER DATED: 21 ST DEC, 2018 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR ITA NO. 2850/DEL/2018 5 DATE 1. DRAFT DICTATED ON 21.12.2018 2. DRAFT PLACED BEFORE AUTHOR 21.12.2018 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 9.1.2019 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.