Kalipada Packaging Industries, Kolkata V. I.T.O Wd - 53(1),kolkata., Kolkata

ITA 9/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78429 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 02-01-2013
• Court: TRIBUNAL
• Department Lawyers: A K DAS
• Section: 143(3); 133A; 11

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , . . . . ! ! ! ! /AND ' #!' ' #!' ' #!' ' #!' , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] !$ / I.T.A NO.09/KOL/2013 #% &'/ ASSESSMENT YEAR: 2006-07 KALIPADA PACKAGING INDUSTRIES VS. INCOME-TAX OFFI CER, WD-53(2), KOLKATA (PAN:AADFK7042B) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 30.07.2014 DATE OF PRONOUNCEMENT: 30.07.2014 FOR THE APPELLANT: SHRI GAURAV MATHUR, ADVOCATE FOR THE RESPONDENT: SHRI A. K. DAS, JCIT, SR. DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXIII, KOLKATA IN APPEAL NO. 170/CIT(A)-XXXIII/ITO,WARD-53(1),KOL/08-09 DATE D 19.10.2012. ASSESSMENT WAS FRAMED BY ITO, WARD-53(1), KOLKATA U/S. 143(3) & 11 5WE(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEARS 2006-07 VIDE HIS ORDER DATED 29.12.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY AO ON ACCOUNT OF DISALLOWANCE OF P ARTNERS SALARY AMOUNTING TO RS.96,000/-. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSE IS A P ARTNERSHIP FIRM ENGAGED IN MANUFACTURING AND SELLING OF CARD BOARD BOXES. DURING THE YEAR UN DER CONSIDERATION, SHRI BHUSAN CHANDRA PAUL, ON OF THE PARTNERS RETIRED AND IN HIS PLACE H IS SON SHRI SOUMEN PAUL WAS INTRODUCED AS NEW PARTNER. IT WAS OBSERVED BY THE AO THAT AT THA T POINT OF TIME SHRI SOUMEN PAUL WAS A STUDENT. A SURVEY U/S. 133A WAS CARRIED OUT AT THE ASSESSEES PREMISES ON 18.11.2005. SHRI RABINDRA NATH JANA, ONE OF THE PARTNERS ADMITTED IN THE STATEMENT RECORDED AT THE TIME OF SURVEY THAT SHRI SOUMEN PAUL WAS HAVING NO ACTIVITY IN THE BUSINESS OF THE ASSESSEE FIRM. HENCE, THE AO HELD THAT SHRI SOUMEN PAUL WAS NOT A WORKING PARTNER AND HE DISALLOWED THE 2 ITA NO.09/K/2013 KALIPADA PACKAGING INDUSTRIES AY 06-07 DEDUCTION CLAIMED FOR REMUNERATION OF RS.96,000/- P AID TO HIM. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO CONFIRMED THE ACTION OF A O BY OBSERVING AS UNDER: 3.2. L HAVE CAREFULLY CONSIDERED THE SUBMISSION MAD E. AS PER SECTON 40(B) OF LNCOME TAX ACT, 1961, IN CASE OF ANY FRM ASSESSABLE AS SU CH, ANY PAYMENT OF SALARY, BONUS, COMMISSION OR REMUNERATION , BY WHATEVER NAME IT MA Y BE CALLED TO ANY PARTNER WHO IS NOT A WORKING PARTNER, SHALL NOT BE ALLOWED AS DEDU CTION. WHILE IT IS TRUE THAT SHRI SOUMEN PAUL WAS A PARTNER OF THE FIRM, IN ORDER TO CLAM DEDUCTION FOR REMUNERATION THE APPELLANT WAS ALSO REQUIRED TO ESTABLISH THAT HE WA S A WORKING PARTNER. THE APPELLANT WAS ASKED, VIDE ORDER SHEET ENTRY DATED 10.08.2011, TO GVE DETATS OF BUSNESS ACTIVITY IN WHCH SHRI SOUMEN PAUL WAS ENGAGED ALONGWITH SUPPOR TING EVIDENCE. ALTHOUGH THE APPELLANTT REITERATED THAT SHRI SOUMEN PAUL WAS ENG AGED IN PROCUREMENT OF ORDERS FOR THE FIRM, NO DETAILS, MUCH LESS ANY SUPPORTING EVID ENCE, WAS PROVDED. AS POINTED OUT BY THE ASSESSING OFFICER, SHRI SOUMEN PAUL WAS, AT THE RELEVANT POINT OF TIME, A STUDENT OF ENGINEERING COLLEGE AT JALPAIGURI. NORMALLY AN ENGI NEERING STUDENT IS REQUIRED TO DEVOTE HIS FULL TIME IN STUDES AND EXTRACURRICULAR ACTIVI TIES AT HIS COLLEGE. CONSIDERING THIS, THE ONUS WAS HEAVILY UPON THE APPELLANT TO ESTABLISH TH AT SHRI SOUMEN PAUL WAS INDEED A WORKING PARTNER, WHICH IT HAS SQUARELY FAILED TO DI SCHARGE. CONSIDERNG THIS, THE DISALLOWANCE OF REMUNERATION TO SHRI SOUMEN PAUI IS CONFIRMED.. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE HAS CONTENDED THAT SHRI S OUMEN PAUL, THE PARTNER WAS ENGAGED IN PROCUREMENT OF ORDERS FOR THE FIRM DESPITE THE FACT THAT HE WAS A STUDENT OF ENGINEERING COLLEGE, JALPAIGURI. SIMPLY ON THE STATEMENT OF SH RI BHUSAN CHANDRA PAUL, ONE OF THE RETIRED PARTNERS AND THAT ALSO DURING THE COURSE OF SURVEY CANNOT BE THE SOLE BASIS FOR DISALLOWING REMUNERATION TO THE PARTNER. HERE, ADMITTEDLY, THE ASSESSEE IS ENGAGED IN THE PROCUREMENT OF ORDERS AND ONCE HE IS ENGAGED IN THE PROCUREMENT OF ORDERS, HE CAN SAFELY BE STATED THAT HE IS WORKING PARTNER. ACCORDINGLY, WE DELETE THE DISALL OWANCE AND APPEAL OF ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- , . . . . , ' #!' ' #!' ' #!' ' #!' , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH JULY, 2014 -. #/0 #1 JD.(SR.P.S.) 3 ITA NO.09/K/2013 KALIPADA PACKAGING INDUSTRIES AY 06-07 2 +##3 43&5- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT KALIPADA PACKAGING INDUSTRIES, ASHUTI M AIN ROAD, MAYNAGORE RAIPUR, MAHESHTALLA 24 PGS (S), KOLKATA-7 00 141. WB. 2 +,)* / RESPONDENT ITO, WARD-53(1), KOLKATA. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 3:#; +# / DR, KOLKATA BENCHES, KOLKATA ,3 +#/ TRUE COPY,