SMT. MADHU & OTHERS,MEERUT vs. ITO, MEERUT

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ITA 874/DEL/2015Status: DisposedITAT Delhi23 December 2015AY 2006-074 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 income of M/s Madhu & Others was rightly taxed in the hands of the appellant assessee (Mrs. Madhu). It further held that since the firm was taxed as an AOP, no deduction for interest paid to partners was allowable.

What were the facts?

The assessee firm appealed against the CIT(A)'s order confirming the taxation of the firm's income in the hands of Mrs. Madhu (individual). The appeal also challenged the disallowance of interest paid to partners.

What were the issues?

Whether the income of a firm can be taxed in the hands of an individual partner, and whether interest paid to partners is deductible when the firm is taxed as an AOP.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Pronounced: 23.11.2015
1.

This appeal is filed by assessee firm against the order of CIT (A) Meerut dated 30.1.2015.

2.

Ground No 1 of the appeal is against the order of CIT (A) in confirming the taxation of Income of M/s Madhu & Others as income of Mrs Madhu Individual. 3. We have dealt with these issues in ground no 1 of the appeal of Mrs Madhu , Individual in and the facts and circumstances of the issues are same. In that appeal we have held that income of M/s Madhu & Others is rightly taxed in the hands of ITA No. 873 & 874 .Del.2015 Mrs Madhu, Meerut V ITO Ward 1 (4) Meerut A Y 2003-04 & 2006-07 the appellant assessee. On the same basis and reasoning we also hold same in this appeal for AY 2006-07. Therefore ground no 1 of the appeal is dismissed.

4.

The ground no 2 of the appeal is against the disallowance of Rs 244358/- in the hands of appellant M/s Madhu & Other – Firm as it is taxed as an AOP and not as a Firm. As we have held in ground no. 4 of appeal for AY 2003-04 in of Mrs Madhu that as M/s Madhu & Others is taxed as an AOP no deduction of interest and remuneration paid to the partners shall be allowed. Therefore on the same basis and reasons we also dismiss ground no 2 of the appeal holding that ld AO has rightly disallowed interest of Rs 2,44,358/- as payment of interest to partners. Therefore ground no 2 of the appeal is dismissed.

5.

On Ground nos. 3, 4 and 5 no specific arguments are advanced by either party and they are general in nature and therefore same are dismissed.

6.

In the result appeal of the assessee is dismissed.. (Order pronounced in the Open Court on 23.12.2015)

Sd/- Sd/- (H.S.Sidhu) (Prashant Maharishi) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 23 /12/2015 *Binita* Copy forwarded to: 1. Appellant a 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR & 874 .Del.2015 Mrs Madhu, Meerut V ITO Ward 1 (4) Meerut A Y 2003-04 & 2006-07

Date Initial 1. Draft dictated on 21/12/2015 2. Draft placed before author 21/12/2015 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.

& 874 .Del.2015 Mrs Madhu, Meerut V ITO Ward 1 (4) Meerut A Y 2003-04 & 2006-07

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