M/S SUGANCHAND RATANLAL GOTEWALA,AJMER vs. INCOME TAX OFFICER, WARD-1-1, AJMER

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ITA 1187/JPR/2018Status: DisposedITAT Jaipur04 April 2019AY 2012-134 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that interest on partner's capital should be calculated after considering withdrawals and deposits made by the partner during the year. The CIT(A)'s order confirming the disallowance was found to be correct.

What were the facts?

The assessee claimed interest on partner's capital at 12% on the opening balance. The Assessing Officer disallowed a portion of this interest, considering the partner's drawings during the year. The CIT(A) confirmed the AO's disallowance.

What were the issues?

Whether interest on partner's capital should be calculated on the opening balance or after considering partner's withdrawals during the year.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1187/JP/2018

Hearing: 02/04/2019Pronounced: 04/04/2019

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1187/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2012-13 cuke M/s Suganchand Ratanlal Gotewala The ITO, Vs. Karraka Chowk, Ward -1(1), Ajmer. Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAIFS 1784 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None (date was noted) jktLo dh vksj ls@ Revenue by : Shri Jai Singh (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 02/04/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 04/04/2019 vkns'k@ ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 09.07.2018 of ld. CIT (A), Ajmer for the assessment year 2012-13. The assessee has raised the following ground:- “1. In the facts and circumstances of the case the Ld. A.O. has erred in making addition of Rs. 1,20,016/- by disallowing interest on capital paid partner Sh. Sunil Ranka amounting to Rs. 1,20,016/- prejudicially on vague basis without any legal ground and the addition is required to be deleted as the same is against law, natural justice and enquiry. M/s Suganchand Ratanlal Gotewala vs. ITO

2. The appellant carves leave to add, amend, alter, vary and or withdraw any or all the above grounds of appeal with the prior permission of the chair.

2.

None has appeared on behalf of the assessee when this appeal was called for hearing. It transpires from the record that on the last date of hearing i.e. on 28.01.2019 the assessee filed an application for adjournment and consequently hearing of appeal was adjourned for today i.e. on 02.04.2019 which was duly noted by the Authorized Representative of the assessee. Despite the date of hearing duly noted down by the ld. AR of the assessee, none has appeared to argue the appeal. Accordingly, we propose to hear and dispose off the appeal ex- parte.

3.

We have heard the ld. DR as well as perused the relevant material on record. The ld. DR has submitted that the Assessing Officer has made disallowance of interest paid on capital of the partner by considering the other drawings made by the partner during the year under consideration. Thus, he has pointed out that the assessee has claimed interest payment @ 12% on the opening balance of the capital account of the partner whereas the AO has restricted the claim by considering the drawings made by the partner during the year under consideration to the extent of Rs. 10,00,129/-. Thus, the ld. DR has 2 M/s Suganchand Ratanlal Gotewala vs. ITO submitted that the ld. CIT(A) has granted one more opportunity to the assessee while calling for remand report from the Assessing Officer.

4.

Having considered the submissions of ld. DR and perusal of the impugned order of the ld. CIT(A), we find that the limited dispute is regarding the claim of interest on partner’s capital whether on the opening balance or after considering the withdrawals/drawings made by the partner during the year under consideration. The assessee has not disputed the drawings/withdrawals made by the partner to the extent of Rs. 10,00,129/-. The ld. CIT(A) after considering the remand report has held in para 4.3 as under:-

“4.3 I have gone through the assessment order, statement of facts, grounds of appeal, written submissions, remand report and rejoinder carefully. It is seen that the appellant has claimed deduction in respect of interest calculated on the opening balance in the capital account of Shri Sunil Kumar Ranka, the partner of the assessee firm. I am in agreement with the view of the AO that interest has to be calculated after considering the various withdrawals and deposits made by the partner during the whole year. Therefore, the disallowance of interest of Rs. 1,20,016/- made by the AO by making order dated 12.12.2017 u/s 154 is hereby confirmed.”

Accordingly, in the absence of any contrary material or fact brought on record by the assessee, we do not find any error or illegality in the impugned order of the ld. CIT(A). M/s Suganchand Ratanlal Gotewala vs. ITO In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 04/04/2019.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 04/04/2019. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Suganchand Ratanlal Gotewala, Ajmer. 2. izR;FkhZ@ The Respondent- ITO, Ward- 1(1), Ajmer. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 1187/JP/2018} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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