PARMESHWAR ENCLAVES (P) LTD.,KOLKATA vs. ASSTT. DIRECTOR OF INCOME TAX, CPC, BANGALORE

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ITA 223/KOL/2022Status: DisposedITAT Kolkata28 September 2022AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue of exempt income from LLP to the Assessing Officer (AO) for verification. The AO was directed to provide an opportunity of hearing and examine the claim with supporting documents.

What were the facts?

The assessee claimed exempt income of Rs. 48,98,228/- as share of profit from an LLP. This claim was not allowed in the processing of the return and a rectification order. The assessee could not attend the hearing before the CIT(A) due to COVID-19 restrictions.

What were the issues?

Whether the share of profit from an LLP is exempt income and whether the assessee was denied a proper opportunity to present evidence.

Which sections of the Income-tax Act were involved?

Section 10(2A),Section 143(1),Section 154,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SRI RAJPAL YADAV & DR. MANISH BORAD

order

: September 28th, 2022 आदेश ORDER

Per Manish Borad, Accountant Member:

1.

This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2017-18 is directed against the I.T.A. No.: 223/Kol/2022 Assessment Year: 2017-18 Parmeshwar Enclaves (P) Ltd. order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short ld. “CIT(A)”] dated 30.03.2022 which is arising out of the assessment order framed u/s 154 of the Act dated 14.01.2020.

2.

The assessee is in appeal before this Tribunal raising the following grounds: “

1) For that various facts mentioned by the CIT (Appeals) are not correct and wrong presumptions have been made from such wrong facts and wrong allegations have been made. 2) For that considering the facts and circumstances of the case the CIT (Appeals) should have allowed the Share of Profit from LLP is an exempt income. 3) For considering the facts and circumstances the Learned CIT(Appeals) should have given further opportunity for production of evidence in connection of appeal filed by the appellant. And he acted illegally to complete the order without giving such opportunity as so hastily. 4) For that the CIT(Appeals) should not have also confirmed the addition of Rs. 48,98,228/- as a share profit from LLP which is exempt as per I.T Act. 5) For that the CIT (Appeals) has disallowed the share profit from LLP merely on doubt and presumption. 6) For that other ground or grounds may be taken before or at the time of hearing.”

3. Ld. Counsel for the assessee submitted that the claim of having earned exempt income as share of profit from Limited Liability Partnership Firm (in short the “LLP”) at Rs. 48,98,228/- has not been allowed by the Centralized Processing Center in the intimation issued u/s 143(1)(a) of the Act in the rectification order u/s 154 of the Act and since due to unavoidable circumstances I.T.A. No.: 223/Kol/2022 Assessment Year: 2017-18 Parmeshwar Enclaves (P) Ltd. and not being able to attend the hearing before ld. CIT(A) due to COVID-19 restrictions the issue may be restored to the ld. Assessing Officer (in short ld. “AO”) having jurisdiction for verifying the claim of the assessee.

4.

Ld. D/R was fair enough not to oppose this request as it is related to claim of exempt income in the nature of share of profit from LLP firm.

5.

We have heard rival contentions and perused the records placed before us. The assessee is aggrieved with the order of the ld. CIT(A) not allowing the claim of exempt income at Rs. 48,98,228/- earned by the assessee as share of profit from LLP firm u/s 10(2A) of the Act. As far as the provision of Section 10(2A) of the Act is concerned the share of profit received by a person from a firm/LLP is exempt from tax. The assessee has claimed to have received such share of profit at Rs. 48,98,228/-. This claim was made in the income tax return filed for AY 2017-18 but not allowed in the processing u/s 143(1) of the Act and also in the rectification order u/s 154 of the Act. Before ld. CIT(A) the assessee failed to comply with the requirement of appearing on the date of hearing due to COVID-19 restrictions.

6.

Under these given facts and circumstances, in the interest of justice and being fair to both the parties we deem it proper to restore the issues raised in the instant appeal including that of claim of exempt income u/s 10(2A) of the Act for share of profit from LLP claimed at Rs. 48,98,228/- to the file of ld. AO who shall provide reasonable opportunity of hearing to the assessee and shall examine the claim of the assessee in light of the documents Page 3 of 4 I.T.A. No.: 223/Kol/2022 Assessment Year: 2017-18 Parmeshwar Enclaves (P) Ltd. to be placed before him/her including the proof of being the designated partner in the LLP, copy of LLP deed, copy of capital account and the copy of income tax return of the LLP from which the alleged sum is received as share of profit. If the claim of the assessee is found to be correct, the same to be allowed by the ld. AO in accordance with law.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Kolkata, the 28th September, 2022. Sd/- Sd/- [Rajpal Yadav] [Manish Borad] Vice President Accountant Member Dated: 28.09.2022 Bidhan (P.S.) Copy of the order forwarded to:

1. 1. Parmeshwar Enclaves (P) Ltd., 135, Cotton Street, Ground Floor, Kolkata-700 007.

2. ADIT, CPC, Bangalore 3. CIT(A), NFAC, Delhi.

4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata.

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