What did the Tribunal hold?

The Tribunal noted that the assessee had succeeded on the identical issue in previous assessment years and that the Revenue had not pointed out any factual distinction. Therefore, the Tribunal directed the Assessing Officer to delete the disallowance.

The assessee firm claimed partner's remuneration of ₹4.80 lac. The Assessing Officer disallowed ₹2.40 lac of this claim, stating it was excessive and not in line with the partnership deed. The assessee had succeeded on the same issue in previous assessment years.

What were the issues?

Whether partner's remuneration claimed by the assessee was allowable despite disallowance by the Assessing Officer, considering past precedents.

Sri Tirupati Ispat, Ranchi vs DCIT | s.143(3) | ITAT Ranchi 2019

Income Tax Appellate Tribunal, RANCHI BENCH “SMC” RANCHI

Before: Shri S.S, Godara

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH “SMC” RANCHI Before Shri S.S, Godara, Judicial Member ITA No.225/Ran/2018 Assessment Year:2014-15

Sri Tirupati Ispat DCIT, Circle-3, बनाम / East Market Road, Upper Ranchi V/s. Bazar, Ranchi-834001 [PAN No.ABDFS 5681 F] .. अपीलाथ� /Appellant ��यथ� /Respondent

Shri Devesh Poddar, Advocate अपीलाथ� क� ओर से/By Appellant Shri Chandan Das, JCIT-DR ��यथ� क� ओर से/By Respondent 11-01-2019 सुनवाई क� तार�ख/Date of Hearing 08-04-2019 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R This assessee’s appeal for assessment year 2014-15, arises against the Commissioner of Income-tax (Appeals)-Ranchi’s order dated 09.05.2018 passed in case No. CIT(A), Ranchi/10306/2016-17, involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused. 2. The assessee’s sole substantive grievance challenges both the lower authorities action disallowing with its partners remuneration claim of ₹4.80 lac to the extent of ₹2.40 lac to be excessive and beyond the relevant stipulation incorporate in the schedule. There is no dispute that the assessee-firm does have three partners, Shri Nikhil Poddar, Aditya Murarka & Rohit Murarka having 50% and 25% stake each; respectively. The assessee paid them remuneration of ₹2.40 lac and 1.20 lac each; respectively in the relevant previous year. The Assessing Officer disallowed the same to the extent of 50% in each case on the ground that the relevant partnership deed

ITA No.225/Ran/2018 A.Y. 2014-15 Sri Tirupati Ispat vs. DCIT, Cir-3, RNC Page 2 never contained such a quantum of remuneration as upheld in the lower appellate proceedings. 3. It emerges during the course of hearing that assessee has already succeeded on the very issue both in assessment years 2012-13 as well as in 2013-14 qua the impugned remuneration claim of ₹4.80 lac paid to the above three partners. It has placed on record its profit and loss account as well as capital account in the said former and section 143(3) assessment order dated 28.01.2016 to this effect. The Revenue’s only argument is that each year is a different assessment year res judicata principle does not apply in income tax proceedings. He is fair enough in not pin- pointing any factual distinction qua the impugned claim in all these three assessment years. I therefore adopt judicial consistency in these facts and circumstances and direct the Assessing Officer to delete the impugned partner’s remuneration disallowance. 4. This assessee’s appeal is allowed. Order pronounced in accordance with Rule 34(4) of the ITAT Rules by putting on Notice Board on 08/04/2019 Sd/- (S.S. Godara) Judicial Member Ranchi, *Dkp/Sr.PS �दनांकः- 08/04/2019 रांची आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. अपीलाथ�/Appellant-Sri Tirupati Ispat, East Market Road, Upper Bazar, Ranchjii-834001 2. ��यथ�/Respondent-DCIT, Circle-3, Ranchi 3. संबं$धत आयकर आयु'त / Concerned CIT 4. आयकर आयु'त- अपील / CIT (A) 5. (वभागीय �+त+न$ध, आयकर अपील�य अ$धकरण रांची / DR, ITAT, Ranchi 6. गाड- फाइल / Guard file. By order/आदेश से, /True Copy/ Sr. Private Secretary/P.S आयकर अपील�य अ$धकरण, रांची ।

SRI TIRUPATI ISPAT,RANCHI vs. DCIT,CIRCLE-3, RANCHI

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