The DCIT, Circle-3, Ahmedabad V. M/s. Pari Tulsidas Narsidas, Ahmedabad

ITA 3208/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50974 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-11-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 30-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD TANWANI
• Assessee Lawyers: B T THAKKAR

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .% $% % $% % $% % $%, , , , &' ( &' ( &' ( &' ( & ' & ' & ' & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER) ITA NO.3208/AHD/2009 [ASSTT.YEAR : 2003-2004] DCIT, CIR.3 AHMEDABAD. /VS. PARI TULSIDAS NARSIDAS 2245, MAHURAT POLE MANEKCHOWK AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI VINOD TANWANI 12 . / &/ ASSESSEE BY : SHRI B.T. THAKKAR 3 . 24'/ DATE OF HEARING : 28 TH NOVEMBER, 2011 5%6 . 24'/ DATE OF PRONOUNCEMENT : 2 ND DECEMBER, 2011 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL FOR A.Y.2003- 2004 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIO NER OF INCOME-TAX (APPEALS)-VII, AHMEDABAD. 2. THE GROUNDS RAISED IN THIS APPEAL OF THE REVENUE READ AS UNDER: 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN HOLD ING THAT THE AOS ACTION IN CHANGING THE STATUS FROM FIRM TO AOP IS UNWARRANTED AND DIRECTING THE AO TO TREAT THE STATU S OF ASSESSEE AS FIRM. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO SINCE THE ASSESSEE HAS FAILED TO DISCLOSE HIS TRUE INCOME. 3. THE LEARNED DR HAS RELIED UPON THE ORDER OF THE AO. HE SUBMITTED THAT NO REMUNERATION WAS PAID TO THE PARTNERS AND T HEREFORE THE AO HAS ITA NO.3208/AHD/2009 -2- RIGHTLY ASSESSED THE INCOME OF THE ASSESSEE UNDER T HE STATUS AOP AND NOT THE FIRM AS CLAIMED BY THE ASSESSEE. HE REFE RRED TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER IN SUPPORT OF THE C ASE OF THE REVENUE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IN THE ASSESSMENT ORDER ITSELF THE AO HAS ALLOWED THE SAID SUM OF RS.14,40,000/- AS DEDUCTION ON ACCOUNT OF REMUNERAT ION PAID TO THE PARTNERS AND THEREFORE THERE IS NO VIOLATION IN TER MS OF DEED OF PARTNERSHIP AND ACCORDINGLY THE ASSESSEE WAS ENTITL ED TO BE ASSESSED UNDER THE STATUS OF FIRM. HE RELIED UPON THE ORDE R OF THE LEARNED CIT(A). 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY A ND HAVE GONE THROUGH THE ORDERS OF THE AO AND THE LEARNED CIT(A) . WE FIND THAT THE FINDING OF THE AO THAT NO REMUNERATION WAS PAID TO THE PARTNERS WAS NOT CORRECT. THE COMPUTATION INCOME SHEET OF THE ASSES SEE SHOWS THAT THE REMUNERATION OF RS.14,40,000/- WAS PAID BY THE ASSE SSEE TO TWO PARTNERS. WE FIND THAT THE AT PAGE NO.7 OF THE ASSESSMENT ORD ER THE AO HIMSELF HAS ALLOWED THE SAID SUM OF RS.14.40 LAKHS AS DEDUCTION ON ACCOUNT OF REMUNERATION PAID TO THE PARTNERS. THE CIT(A) HAS RECORDED THAT THE ITAT IN ASSESSEES OWN CASE HAS UPHELD THE CLAIM OF THE ASSESSEE TO THE STATUS OF FIRM FOR THE IMMEDIATELY PRECEDING ASST T.YEAR 2002-2003. IN THESE FACTS OF THE CASE, SINCE THE CONSTITUTION OF THE FIRM IS EVIDENCED BY AN INSTRUMENT OF PARTNERSHIP WHEREIN THE SHARE OF T HE PARTNERS WAS SPECIFIED AND THERE WAS NO CHANGE IN THE CONSTITUTI ON OF THE FIRM DURING THE RELEVANT A.Y.2003-2004 AND THE STATUS OF THE FI RM HAS BEEN UPHELD BY THE TRIBUNAL IN EARLIER ASSTT.YEAR 2002-2003 AS FI RM, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ASSESS THE ASSESSEE IN THE STATUS OF FIRM. IN THESE CIRCUMS TANCES, WE UPHOLD THE ITA NO.3208/AHD/2009 -3- ORDER OF THE CIT(A) ON THIS ISSUE AND GROUNDS OF TH E REVENUE BEING WITHOUT ANY MERIT ARE DISMISSED. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( #.% $% /A.MOHAN ALANKAMONY) &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD