M/S V3 CORPORATION,AGRA vs. PR.CIT.-1, AGRA

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ITA 45/AGR/2021Status: DisposedITAT Agra10 February 2025AY 2015-16Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)1 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's argument of an "addendum" to the partnership deed, which would enable remuneration and interest payments to partners, was not supported by evidence and had never been produced. Therefore, the Tribunal found that the Pr.CIT had rightly invoked his Section 263 jurisdiction to declare the assessment erroneous.

What were the facts?

The assessee's appeal for assessment year 2015-16 arises against the PCIT's order under section 263 of the Income-tax Act. The PCIT held that the Assessing Officer's regular assessment was erroneous, causing prejudice to the interest of the Revenue. This was because the partners' remuneration under section 40(b) was accepted without a corresponding clause in the partnership deed.

What were the issues?

Whether the PCIT was justified in invoking Section 263 revision jurisdiction on the ground that the Assessing Officer's assessment was erroneous due to acceptance of partners' remuneration without a corresponding clause in the partnership deed.

Which sections of the Income-tax Act were involved?

Section 40(b),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, AGRA

Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL

Hearing: 10.02.2025Pronounced: 10.02.2025

PER SATBEER SINGH GODARA, JUDICIAL MEMBER:

1.

This assessee’s appeal for assessment year 2015-16 arises against PCIT, Agra-1’s DIN and Order No. ITBA/REV/F/REV5/2020- 21/1031215705(1) dated 04.03.2021, involving proceedings u/s 263 of the Income-tax Act, 1961, [hereinafter referred to as the ‘Act’].

2.

Heard both the parties at length. Case file perused.

3.

It emerges during the course of hearing that the Learned PCIT assessee has exercised his Section 263 revision jurisdiction thereby holding that the Assessing Officer’s regular assessment framed on 06.06.2017 is an erroneous one causing prejudice to the interest of the Revenue on the ground that assessee’s partners remuneration u/s 40(b) of the Act had been accepted without have any corresponding clause in relevant partnership deed.

4.

Faced with this situation the assesse vehemently argues that there was in fact an “addendum” to it’s original partnership deed enabling such a remuneration and interest payment(s) to partners; and, therefore, we ought to reverse the Learned PCIT impugned revision direction. The learned Counsel could hardly dispute the fact that the assessee’s alleged “addendum” to the partnership deed has never seen light of the day till date.

5.

That being the case, we are of the considered view that the learned Pr.CIT has rightly invoked his Section 263 statutory revision jurisdiction to hold the impugned assessment as an erroneous one and prejudice to interest of the Revenue in very terms. Ordered accordingly.

6.

This assessee’s appeal is dismissed.

Order pronounced in the open court on 10.02.2025

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