M/s Fabricare Laundramates Incorporation, Solan V. ITO, Baddi

ITA 713/CHANDI/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5133 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES(SMC), CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 713/CHD/2017 ASSESSMENT YEAR: 2008-09 FABRICARE LAUNDRAMATES INCORPORATION VS. THE ITO VILLAGE MUSSEWAL BADDI TEHSIL NALAGARH, DISTT. SOLAN PAN NO. AABFF5629D (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 01/06/2017 DATE OF PRONOUNCEMENT : 01/06/2017 ORDER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(A), FARIDABAD DT. 01/02/2017 FOR ASSESSMENT YEA R 2008-09 CHALLENGING THE ADDITION OF RS. 4,61,059/- ON ACCOUNT OF DISALLOWAN CE OF INTEREST PAID ON PARTNERS CAPITAL. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS A FIRM. THE AO NOTED THAT ASSESSEE FIRM HAS PAID INTEREST TO THE PARTNER S AMOUTING TO RS. 4,61,059/- ON THEIR CAPITAL. THE AO ONGOING THROUGH THE PARTNERSH IP DEED OBSERVED THAT THERE IS NO PROVISION FOR PAYMENT OF INTEREST ON CAPITAL TO THE PARTNERS. CLAUSE 5 OF THE PARTNERSHIP DEED IS REPRODUCED IN THE ASSESSMENT OR DER WHICH SHOWS THAT CAPITAL INTRODUCED BY THE PARTNERS SHALL NOT BEAR A NY INTEREST UNLESS OTHERWISE AGREED UPON. EVEN THE PROFIT SHARING RATIO IS NOT D EFINED. NO EXPLANATION HAS BEEN FURNISHED BEFORE AO. AO WAS THEREFORE OF THE V IEW THAT INTEREST ON CAPITAL IS NOT ALLOWABLE AND ACCORDINGLY MADE THE ADDITION OF RS. 4,61,059/-. THE LD. CIT(A) ALSO OBSERVED THAT ASSESSEE HAS FAILED TO ES TABLISH THAT IT WAS AGREED UPON BY THE PARTNERS THROUGH ANY AMENDMENT OR OTHER WRITTEN UNDERSTANDING TO PAY INTEREST ON CAPITAL. THIS GROUND WAS ACCORDINGL Y DISMISSED. 2 3. NONE APPEARED ON BEHALF OF THE ASSESSE AT THE TI ME OF HEARING OF THE APPEAL DESPITE RECEIPT OF THE NOTICES FOR THE DATE FIXED ON 01/06/2017. 4. LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 5. AFTER CONSIDERING FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS OF THE LD. DR, I DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. SINCE IN THE PARTNERSHIP DEED IT IS NOT PROVIDED TO PAY ANY INTE REST ON THE CAPITAL AND NO EVIDENCE IS PRODUCED IF PARTNER IN WRITING OTHERWIS E AGREED FOR PAYMENT OF INTEREST ON CAPITAL, THEREFORE, AUTHORITIES BELOW W ERE JUSTIFY IN MAKING AND CONFIRMING THE ADDITION. THE APPEAL OF THE ASSESSEE HAS NOT MERIT, SAME IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED.. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 01/06/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, THE CIT(A), THE DR