SHREE RAM EXPORTS,MAHUVA vs. THE ACIT, CPC, BANGLORE

The solitary ground of appeal of the assessee is against the decision of ld. CIT(A) in holding that CPC, Bangalore is justified in disallowing u/s. 143(1), a sum of Rs. 6,30,000/- paid as remuneration to partner.

The fact in brief is that assessee is a registered firm and filed its return of income on 29th Sep, 2015 declaring total income at Rs. 7,63,850/-. The CPC has processed the aforesaid return of income on 9th April, 2016 and computed the total aggregate income of the assessee at Rs. 13,93,850/- as against aggregate income of Rs. 7,63,850/- provided by the assessee in the return of income. The asssessee has filed appeal before the ld. CIT(A).

The ld. CIT(A) has rejected the appeal of the assessee on the ground that assessee has claimed remuneration paid to two partners at Rs. 7,50,000/- in the P & L Account, however, as per the detail filed in the income returned the remuneration paid to partners was shown at Rs. 1,20,000/-.

During the course of appellate proceedings before us, the ld. counsel has filed paper book comprising copy of return of income, computation of income, audited return and accounts, computation of income, audited accounts for assessment year 2012-13 etc. The ld. Counsel has submitted that as per audit report u/s. 144AB of the act, remuneration of Rs. 6,30,000/- was paid to the partner and it is incorrectly disallowed u/s. 143(1) of the act. Therefore, the claim of payment of remuneration to partner is to be allowed. On the other hand, ld. departmental representative supported the order of lower authorities.

We have heard both the sides and perused the material on record. We have gone through the intimation u/s. 143(1) of the act issued by the CPC, Bangalore. It is noticed as per the copy of income tax return filed by the assessee. The assessee has total income at Rs. 7,63,850/- which was Page No 3 Shree Ram Exports vs. ACIT enhanced to Rs. 13,93,850/- by the order of CPC u/s. 143(1) dated 9th April, 2016. In this connection, we have further noticed that assessee has not been given any opportunity to explain the discrepancy which was detected by the CPC. The ld. CIT(A) has held that assessee has inadvertently mentioned Rs. 1,20,000/- as remuneration paid to partners while actual payment of Rs. 7,50,000/- was made to the partners as remuneration. With the assistance of ld. representatives, we have gone through the paper book filed by the ld. counsel and he has demonstrated by referring page no. 45 and other pages of audit report 44AB that assessee has paid remuneration to the partner to the amount of Rs. 7,50,000/- which was inadvertently reported at 1,20,000/-. Since these primary information and document has not been examined by the assessing officer, therefore, we consider it appropriate to restore this issue to the file of assessing officer to decide de-novo after examination and verification of the record and information to be supplied by the assessee. Accordingly, the matter is restored to the file of the assessing officer as directed above. Therefore, the appeal of the assessee is allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 23-07-2019 Sd/- Sd/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 23/07/2019 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:-