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

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ITA 43/NAG/2018Status: DisposedITAT Nagpur09 June 2022AY 2008-20094 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the partnership deed was available with the Assessing Officer from a prior assessment year and there had been no change in its constitution. Therefore, the disallowances were directed to be deleted.

What were the facts?

The assessee's appeal concerned disallowances of partner's remuneration and interest on partner's capital for AY 2008-09. The disallowance was made because the partnership deed was not furnished during the assessment proceedings.

What were the issues?

Whether disallowance of partner's remuneration and interest on partner's capital is justified solely on the ground of non-furnishing of the partnership deed during assessment proceedings when it was available from a prior year.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR

Before: SHRI VIKRAM SINGH YADAV & SHRI YOGESH KUMAR U.S

For Appellant: Shri K.P.Dewani, Advocate
For Respondent: Shri Rajeev Benjwal, CIT

Date of Hearing – 09.06.2022 Date of Order – 09.06.2022

O R D E R PER SHRI VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee directed against order of the Learned Commissioner of Income Tax-1, Nagpur, dated 21.07.2017, wherein the limited grounds relates to sustaining of disallowance of . 46,206/– and . 2,10,181/– in respect of partner’s remuneration and interest on partner’s capital respectively pertaining to A.Y. 2008–09.

2.

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.

3.

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.

4.

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

5.

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.

6.

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

Sd/– Sd/– YOGESH KUMAR U.S VIKRAM SINGH YADAV JUDICIAL MEMBER ACCOUNTANT MEMBER

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