C I T JAIPUR vs. M/S VIJAY KUMAR AND COMPANY

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 285 / 2010 Commissioner of Income Tax-Central, New Central Revenue Building, Statue Circle, Jaipur (Raj) ----Appellant Versus M/s Vijay Kumar & Co., 161, Ward-7, Chandni Chowk, Purani Abadi, Sriganganagar. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Gaurav Gaur for Mr. Anil Mehta For Respondent(s) : Mr. Anant Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 21/08/2017 1. By way of this appeal, the appellant has challenged the judgment and order of the tribunal whereby the tribunal has allowed the appeal of the assessee and set aside the order of CIT(A) under Section 263 of the IT Act. 2. This court while admitted the matter has framed following substantial questions of law:- “Whether the Tribunal was justified in deleting the addition of Rs.1,63,45,448/- by holding that the said amount has been added in the hands of the partners of the asessee-firm, having knowledge of the fact that it has deleted the addition even in the hands of partners of the assessee-firm by its order of even date i.e. 30/05/2010?” “Whether the Tribunal was justified in confirming the deletion of addition of Rs.3,71,497/-, ignoring that no detailes at all were furnished by

the assessee before the Assessing Officer of the expenses claimed by it and no opportunity of considering the said expenditure was allowed to the Assessing Officer?” 3. Counsel for the respondent contended that no doubt the matter is admitted on two issues but for the income in the hands of partners is subject matter of appeal before the tribunal. 4. In that view of the matter, we have taken on record the appeal is pending before the tribunal. It will not be appropriate to allow tax on both partnership as well as partner. 5. In that view of the matter and in view of observations made by the tribunal in para 10 which reads as under:- “10. We have heard rival submissions and considered them carefully. After considering the submissions and perusing the material on record and looking to the facts of the case and arguments of ld. D/R, we are of the considered view that this is a case of small addition made by the AO, but looking to the expenses claimed in Profit and Loss account, we find that it will be futile exercise to restore the matter to the AO. Major expenditure claimed is on account of licence fee which is paid through proper banking channel. We have also seen other expenses and found that major expenses are on account of repairs and maintenance, salary, cable connection charges, security charges, telephone and telex charges and audit fees etc. The quantum of expenses are not such that can be doubted that they were not for the purpose of running of the hotel. This is also undisputed fact that there is a dispute among the original hotel owners and the partners of the firm. A FIR was lodged, copy of which is placed at pages 9 to 11 of the paper book. In this FIR it has been stated that the partners of the firm were not allowed to enter in the hotel premises. In view of these facts and circumstances, we hold that ld. CIT(A) has passed a reasonable order by sustaining the addition of Rs.50,000/-. Therefore, the order of ld. CIT(A) is confirmed.”