The ACIT 3(1), Indore V. Shri Bharat Jain, Indore

ITA 768/Ind/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2928 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Keywords: Additional evidence
• Section: 143(3); 80IB; 147

Judgement Text

[ITA NOS.768 & 769/IND/2019] [SHRI BHARAT JAIN] IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.768 & 769/IND/2019 ASSESSMENT YEARS: 2009-10 & 2010-11 ACIT - 3(1) INDORE / VS. SHRI BHARAT JAIN 117, SHANTI NIKETAN, NEAR BOMBAY HOSPITAL INDORE ( REVENUE ) (RE SPONDENT ) P.A. NO. ABFPJ3503K RE VENUE BY SHRI R.P. MOURYA, SR. DR RESPONDENT BY SHRI SUDH IR PADLIYA, CA DATE OF HEARING: 04.03.2020 DATE OF PRONOUNCEMENT: 09.03.2020 / O R D E R THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAINST ORDER OF THE CIT(A)-I, INDORE DATED 27.05.2019 PERTAI NING TO THE ASSESSMENT YEAR 2009-10. SINCE THE ISSUES ARE COMMON BOTH APPEALS ARE TAKEN UP TOGETHER AND ARE BEING DISPOSED BY WAY OF CONSOLIDATED ORDER. [ITA NOS.76 8 & 769/IND/2019] [SHRI BHARAT JAIN] 2 2. FIRST WE TAKE UP THE REVENUES APPEAL IN ITANO.768/IND/2019 FOR THE ASSESSMENT YEAR 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 1,80,000/- ON ACCOUNT OF REMUNERATIONS TO THE ASSESSEE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCES IN FORM OF ADDENDA TO PARTNERSHIP DEED IN VIOLATION OF RULE 46A AND WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER. (THE CASE IS COVERED IN EXCEPTION AS PER PARA 10(C) OF CIRCULAR 3/2018 REGARDING MONETARY LIMIT) 3. THE APPELLANT CRAVES LEAVE TO ADD TO OR DEDUCT FROM OR OTHERWISE AMEND THE ABOVE GROUNDS OF APPEAL. 3. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED FOR ASSESSMENT AND THE ASSESSMENT U/S 147 R.W.S 143(3) OF THE INCOME TAX AC T 1961(HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE O RDER DATED 21.11.2016. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT, NOTICED THAT THE SALARY OF RS.1,80,000/- @ RS.15,000/- PER MONTH HAS BEEN ESCAPED FROM ASSESSMEN T [ITA NOS.76 8 & 769/IND/2019] [SHRI BHARAT JAIN] 3 AND THE DEDUCTION U/S 80IB WAS CLAIMED IN EXCESS TO TH AT EXTENT. HENCE, THE ASSESSING OFFICER MADE ADDITION OF RS.1,80,000/-, THE INCOME OF THE ASSESSEE WAS ASSED AT RS.7,59,070/- AGAINST RETURNED INCOME OF RS.5,79,070/ -. 4. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISS IONS ALLOWED THE APPEAL. 5. LD. D.R. VEHEMENTLY ARGUED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION, HE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 6. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE LD. CIT(A) HAS GIVEN A FINDING ON FACT WHICH IS NOT CONTROVERTED BY THE REVENUE. 7. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. CIT(A) HAS DECIDED TH IS ISSUE BY OBSERVING AS UNDER: [ITA NOS.76 8 & 769/IND/2019] [SHRI BHARAT JAIN] 4 EXEMPTION U/S 80IB OF THE IN COME TAX ACT, 1961 AND DURING THE YEAR UNDER CONSIDERATION HAS CLAIMED EXEMPTION OF RS.2,18,16,434/-. HOWEVER, IT IS OBSERVED THAT THE EXEMPTION CLAIMED BY THE ABOVE FIRM INCLUD ED AN AMOUNT OF RS. 1,80,OOO/- SHOWN AS REMUNERATION ALLOWABLE TO THE PARTNER AS PER PARTNERSHIP DEED. THE APPELLANT HAS NOT DISPUTED THE FACT THAT THE EXEMPT ION AMOUNT INCLUDED AN AMOUNT OF RS.1,80,OOO/-. HOWEVER, IT IS MAINLY CONTENDED THAT THE SAID AMOUNT OF REMUNERATION WAS NEVER PAID TO THE PARTNER I.E. TH E APPELLANT UNDER CONSIDERATION. THE APPELLANT HAS AL SO FILED THE DETAILED WRITTEN SUBMISSIONS WHICH ARE DU LY REPRODUCED ABOVE. IT IS FOUND THAT THE ENTIRE SET O F SUBMISSIONS REVOLVED AROUND THE POINT THAT THE REMUNERATION WAS NEVER PAID TO THE APPELLANT AS SUC H THE SAME CANNOT BE TAXED NOTIONALLY AS DEEMED REMUNERATION. FURTHER, DURING THE COURSE OF APPEAL PROCEEDINGS, THE APPELLANT HAS FILED A COPY OF ADDE NDA TO THE PARTNERSHIP DEED WHICH CLEARLY DOES AWAY WITH T HE TERMS SPECIFIED IN CLAUSE 7 & 9 OF PARTNERSHIP DEED WHICH PROVIDED FOR REMUNERATION TO THE .PARTNERS, T HE PARTNERSHIP DEED IS DATED 24/03/2005 AND THE ADDEND A TO THE SAME ARE DATED 31/03/2005. THIS CLEARLY SHOW S THAT THE INTENDED PAYMENT OF REMUNERATION TO THE PARTNERS WAS DULY WITHDRAWN WITHIN 7 DAYS OF PARTNERSHIP DEED. THEREFORE, IN MY CONSIDERED OPINI ON THE REMUNERATION TO THE PARTNERS HAVE NOT BEEN PAID BY THE FIRM AS SUCH THE AO HAS NOT BEEN FOUND JUSTIFIE D IN MAKING ADDITION OF RS.1,80,000 / - ON NOTIONAL' B ASIS. THIS GROUND OF APPEAL IS ALLOWED. 8. THE ABOVE FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE. WE DO NOT SEE ANY REASON TO INTERFERE IN THE [ITA NOS.76 8 & 769/IND/2019] [SHRI BHARAT JAIN] 5 FINDING OF LD. CIT(A) SAME IS HEREBY AFFIRMED. GROUND S RAISED IN THIS APPEAL ARE DISMISSED. 9. NOW WE TAKE UP THE REVENUES APPEAL IN ITANO.769/IND/2019 FOR THE ASSESSMENT YEAR 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 1,80,000/- ON ACCOUNT OF REMUNERATIONS TO THE ASSESSEE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCES IN FORM OF ADDENDA TO PARTNERSHIP DEED IN VIOLATION OF RULE 46A AND WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER. (THE CASE IS COVERED IN EXCEPTION AS PER PARA 10(C) OF CIRCULAR 3/2018 REGARDING MONETARY LIMIT) 3. THE APPELLANT CRAVES LEAVE TO ADD TO OR DEDUCT F ROM OR OTHERWISE AMEND THE ABOVE GROUNDS OF APPEAL. 10. THE FACTS ARE IDENTICAL AS WERE IN THE ITANO.768/IND/2019 BOTH REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENTS FOR THE SAME REASONING. I DO NOT SEE ANY REASON TO INTERFERE IN THE FINDING OF LD. [ITA NOS.76 8 & 769/IND/2019] [SHRI BHARAT JAIN] 6 CIT(A) SAME IS HEREBY AFFIRMED. GROUNDS RAISED IN THIS APPEAL ARE DISMISSED. 11. IN THE RESULT, THESE APPEALS FILED BY THE REVENU E ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 09 .03. 2020. SD/- (KU L BHARAT) JUDICIAL MEMBER INDORE; DATED : 09/03/2020 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE