M/S. S.M.INDUSTRIES ,AMRAVATI vs. INCOME TAX OFFICER , WARD -3, AMRAVATI

At the outset, it is noted that there is a delay of ‘55’ days in filing the present appeal. After considering the affidavit filed by the assessee and hearing both the parties, the delay in filing appeal is hereby condoned and the appeal is admitted for adjudication.

During the course of hearing, the ld. AR submitted that the sole reason for disallowance of partner’s remuneration and interest on partner’s capital is on account of non–furnishing of the partnership deed as held by the Assessing Officer. It was submitted that during the course of appellate proceedings as also evident from the order of the ld.CIT(A). It was submitted that the copy of the partnership deed has been duly filed along with the return of income for A.Y. 2006–07 and the same is available on record with the Assessing Officer. It was further submitted that the appellant firm was constituted on 24.11.2005 and thereafter, there has been no change in the constitution as well as content of the partnership deed and in this regard, our reference was drawn to the copy of the partnership deed, which is placed at pages No 5 to 8 of the assessees paperbook. It was accordingly submitted that the disallowance so made by the Assessing Officer and confirmed by the ld.CIT(A), we directed to be deleted.

Per contra, the ld. DR has relied on the order of the lower authorities.

After hearing both the parties and perusing the material available on record, we find that the sole reason for disallowance of the partner’s remuneration as well as interest on partner’s capital is on account of non–furnishing of the partnership deed, during the course of assessment proceedings, at the same time, it is the matter of record that the assessee has duly filed the copy of the partnership deed, with the return of income for A.Y. 2006–07 and which is available as part of the assessment records with the Assessing Officer. Given the statement of the ld. AR at the Bar that there has been no change in the constitution or contents of the partnership deed and taking into account, the entirety of facts and circumstances of the case, we hereby direct the deletion of partner’s remuneration as well as interest on the partner’s capital account.

In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 09 .06.2022