PR. COMMISSIONER OF INCOME TAX, BIKANER vs. M/S PANNA LAL CONSTRUCTION COMPANY

Judgment / Order Per Hon'ble Mr. Justice Gopal Krishan Vyas 09/04/2018

In this D.B. Income Tax Appeal filed under Section 260A of the Income Tax Act, the revenue has challenged the judgment dated 14.9.2017 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in ITA NO.138/Jodh/2015 for the assessment year 2010-11. Brief facts of the case are that return of income for the assessment order under consideration was submitted by the assessee on 14.10.2010. Subsequently, the case of the assessee was selected for scrutiny and as per the facts available on record, the assessment order dated 31.12.2012 was passed assessing the total income of the assessee. Subsequently, the matter was taken

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under the revision exercising jurisdiction available under Section 263 of the Act of 1961 on account of audit objection raised regarding allowing the remuneration of Rs.1,98,549/- to the partners. The revisional authority passed an order on 30.3.2015 and set aside the assessment order dated 31.12.2012 and order passed after providing proper opportunity of hearing to the assessee.

Being aggrieved and dissatisfied with the order dated 30.3.2015 by the CIT under Section 263 of the Act of 1961, the assessee preferred an appeal before the ITAT and ITAT vide order dated 14.9.2017 passed in ITA No.138/Jodh/2015 allowed the appeal of the assessee and set aside the order passed by the CIT under Section 263 of the Act of 1961 and restored the order of AO.

In this appeal, the order dated 14.9.2017 passed by the ITAT is under challenged.

Learned counsel for the appellant submits that ITAT has not examined the case in its entirety, objectivity and in correct perspective, therefore, finding recorded by the learned ITAT are ex-facie contrary to facts and law. Learned counsel for the appellant further submits that learned ITAT has passed the order without appreciating the relevant facts, therefore, the order is erroneous and contrary to the material available on record. It is also submitted that learned ITAT is recorded cryptic findings without dwelling upon the relevant facts of the case, therefore, it is a case in which substantial question of law “whether on the facts and in the circumstances of the case, the learned ITAT is (3 of 3) [ITA-30/2018]

legally correct in quashing the revision order under Section 263 passed by the CIT, Bikaner ignoring the facts and material available on record?”.

The learned counsel Mr. Lokesh Mathur entered caveat on behalf of the respondent.

After hearing learned counsel for the parties, we have perused the order passed by the learned ITAT. The learned ITAT gave clear cut finding that order of learned CIT would liable to be quashed because there is no error or omission in the order passed by the AO. The issue with regard to remuneration is in accordance with statutory provisions and computation of the books profits was in accordance with the book profit and a possible view had been taken by the AO. It is also observed that AO had himself observed that due to application of GP rate no adverse inference is drawn and further observed that indirect expenses allowed the said issue is also covered with the judgment in case of JK Construction Company in ITA No.801 and 302/Ju/2005. In our opinion, the order of revisional authority is not sustainable in law in view of the judgment of rendered by learned ITAT in case of JK Construction Company (supra). Therefore, no substantial question of law emerges for consideration.

Hence, this income tax appeal is hereby dismissed.

(RAMCHANDRA SINGH JHALA) J. (GOPAL KRISHAN VYAS) J.