MS SAI KRUPA ENTERPRISES,BHUBANESWAR vs. INCOME TAX OFFICER, WARD-5(2), BHUBANESWAR

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ITA 188/CTK/2024Status: DisposedITAT Cuttack25 June 2024AY 2015-163 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and restored the matter to the AO. The AO is directed to accept the resolution dated 31.3.2014, examine it as per law, and consider the remuneration payment on merits after giving the assessee an adequate opportunity of hearing.

What were the facts?

The assessee claimed remuneration paid to partners, which was disallowed by the Assessing Officer. The assessee argued that the remuneration was as per the partnership deed and a resolution dated 31.3.2014, but this resolution was not considered by the AO due to lack of opportunity and by the CIT(A) as additional evidence.

What were the issues?

Whether the disallowance of partner remuneration was justified without considering the partnership resolution, and whether the resolution could be admitted as additional evidence.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

For Appellant: Shri Nihar Ranjan Biswal, CA
For Respondent: Shri Charan Dass, ld Sr DR
Hearing: 25/0Pronounced: 25/0

O R D E R This is an appeal filed by the assessee aga This is an appeal filed by the assessee against the order of the ld nst the order of the ld Addl/JCIT(A)-9, Mumbai 9, Mumbai dated 6.2.2024 in Appeal No. in Appeal No.CIT(A),Bhubaneswar- 2/10081/2019 2/10081/2019-20 for the assessment year 2015-16.

2.

Shri Nihar Ranjan Nihar Ranjan Biswal, ld AR appeared for appeared for the assessee. Shri Charan Dass, ld Sr DR , ld Sr DR represented on behalf of the revenue. represented on behalf of the revenue.

3.

It was submitted by ld AR It was submitted by ld AR the assessment u/s.143(3) r.w.s the assessment u/s.143(3) r.w.s. 263 has been passed by the Assessing Officer disallowing the payment of been passed by the Assessing Officer disallowing the payment of been passed by the Assessing Officer disallowing the payment of remuneration to the partners. It was the submission that the remuneration remuneration to the partners. It was the submission that the remuneration remuneration to the partners. It was the submission that the remuneration to the partners are paid as per the provision as mentioned in the to the partners are paid as per the provision as mentioned in the to the partners are paid as per the provision as mentioned in the partnership deed, which is quantified in partnership deed, which is quantified in the resolution dated 31.3.2014. It the resolution dated 31.3.2014. It P a g e 1 | 3 was the submission that proper opportunity was not given by the Assessing Officer to furnish the resolution dated 31.3.2014, therefore, same was not produced. Ld AR submitted that although before the ld CIT(A), the resolution was produced but same was not accepted on the ground that the resolution becomes a piece of additional evidence, which cannot be admitted in view of the provisions of Rule 46A of I.T.Rules, 1962. It was his prayer that the matter may be restored back to the file of the AO to consider the resolution dated 31.3.2014 for considering the payment of remuneration to the partners.

4.

In reply, ld Sr DR submitted that the so called resolution referred by ld AR is an afterthought, therefore, same should not be accepted.

5.

I have considered the rival submissions. The sole grievance of the assessee is against the disallowance of payment of remuneration of Rs.3,10,339/- to the partners. Ld AR submitted that in the resolution dated 31.3.2014, it is mentioned that the remuneration will be paid to the partners, which has not been considered by the ld CIT(A). It is the claim of the assessee that the payment of remuneration is quantified in the resolution of partnership deed. This being so, we set aside the order of the ld CIT(A) and restore the matter back to the file of the Assessing Officer to accept the resolution dated 30.3.2014 to be produced by the assessee and examine the same as per law and then consider on merits after allowing adequate opportunity of hearing to the assessee. P a g e 2 | 3

6.

In the result, appeal of the assessee stands partly allowed for statistical purposes .

Order dictated and pronounced in the open court on 25/06/2024.

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