TaxTMI 
TaxTMI 
2016 (1) TMI 244
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....eed has not furnished alongwith return of income which is mandatory as per Section 184(2) of the I.T. Act, 1961. (ii) deleting disallowance of Rs. 8,23,506/- on account of claim of interest and remuneration paid to partners treating status of firm (iii) restricting disallowance on account of telephone expense from Rs. 81,366/- to Rs. 31,366/-." 2.1 The notice was sent to the last known address of the assessee through Registered A/D but the same has been returned by the postal authority with the remarks that 'there is no firm exist in this name'. Therefore, the Bench decided to proceed in the matter ex-parte as per the materials available on record at the time of hearing of the appeal. 3.1 Now we take up the Ground No....
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....993 in respect of which assessment as a firm is first sought. Explanation - For the purpose of this sub-section, the copy of the instrument of partnership shall be certified in writing by all the partners (not being minors) or, where the return is made after the dissolution of the firm, by all persons (not being minors) who were partners in the firm immediately before its dissolution and by the legal representative of any such partner who is deceased.'' The AO observed that the express reading of the above provisions clearly specify that the submissions of certified copy of the partnership deed along with the return of income is mandatory to claim the status of "firm" if it is relevant to the year of execution of partnership dee....
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....ection 184(2), the assessee has to accompany the certified copy of partnership deed alongwith the return. From the side of assessee, none appeared on behalf of the assessee nor any written reply has been filed 3.4 We have heard the ld. DR and perused the materials available on record. It is not under dispute that the assessee has furnished a certified copy of the partnership deed during the course of assessment proceedings. It is also not under dispute that the AO has not found any infirmity or illegality in the partnership deed. Only dispute is regarding the point of time when the assessee was required to file the certified copy of the partnership deed in compliance with section 184(2) of the Act. Whether the certified copy of the partn....
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....on at (i) is really satisfied. The object of filing a certified copy appears to be to verify the existence of the partnership with the partners' shares specified therein. This document is relevant for the purposes of assessment as a firm. Therefore, if the certified copy of the instrument is available before the Assessing Officer when he sits down for framing the assessment on merits, the object of the Legislature is achieved because it is at that stage that the compliance of the requirements of section 184(2) is to be ascertained. If that was so, the requirement of the certified copy accompanying the return does not seem to be of such a compelling nature that it may lead to denial of the status of a firm in cases where compliance of the re....
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....the status of the firm. Thus, Ground No. 1 and 2 raised by the Revenue are dismissed. 4.1 Ground No 3. of the Revenue is for restricting the disallowance on account of telephone expense from Rs. 81,336/- to Rs. 31,366/-. 4.2 Brief facts relevant for this ground are that the assessee had claimed Rs. 97,992/- on account of telephone and mobile expenses. However, on scrutiny of the record, the AO observed that phones/ mobiles are not related to the business of the assessee and they are neither in the name of the partners nor installed in the business premises of the assessee and thus disallowed the expenses to the extent of Rs. 81,336/- by adding them to the income of the assessee. 4.3 The assessee preferred first appeal before the ld....