TaxTMI 
TaxTMI 
2010 (8) TMI 1003
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....s raised by the assessee are as under:- "1. The CIT (A) erred in confirming the order of the JCIT with reference to the addition made to your appellant's income on account of sundry creditors as on 31st March, 2003. 2. The CIT (A) erred in confirming the addition of Rs. 32,85,000 made by the JCIT on account of the income diverted to the retired partners under the partnership deed. 3. The CIT (A) erred in rejecting your appellants ground where a direction for granting credit for tax of Rs. 8,83,383/- deducted at source was sought by your appellants as and when the certificates are made available. 4. The CIT (A) erred in not adjudicating on the ground raised by your appellant on levy of interest under section 234C(1) of the I.T.Act." 5. Apropos Ground No.1, facts are that the Assessing Officer noted that the assessee was following cash system of accounting and yet it was showing certain amounts as its liabilities. He observed that in cash system of accounting, these expenses could be allowed only in the year of payment. The assessee pointed out that these items are typically in the nature of adjustments to the revenue accounts on the basis of timing or give and tak....
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....egistrar-High Court- 250,000 b. Devyoli Haldar 6,995 c. Ruchika Kahar 17,101 d. Ashish Garg 15,757 e. Abhishek Verma 15,613 f. Poonam Gupta 20,006 g. Kanchan Tuli 21,945 h. Kirti Shama 22,500 i. Anubhabh Rastogi 20,328 j. SheetalMittal 10,422 k.Rajesh Surana 18,351 l. Sameer Wadhwa 32,836 m. Rohit Sachdev 12,055 n. Excel Marketing 1,855 44,697 Legal case. Paid/W.Back in F.Y.07-08 Salary cheques of Employees. Subsequently paid/W.back in F.Y. 03-04 and F.Y. 04-05 Paid/w.back in F.Y. 2003-04 3. Unpaid balance a. Ankit Agarwal 2,800 b. Rajesh Dua 18,578 c. Manish Gupta 11,735 d. Nikhil Kumar Jain 11,584 44,697 Salary cheques of employees. Subsequently paid in June, 2003 i.e. in F.Y.2003-04 4. Suspense 3,507 Travel Exp. Of Mr J.M Seth. Paid in F.Y. 03-04 5. Others a. NEA 129,450 b. NEA 15,000 c. Richard OP.Slater (DFIDstudy) 192,400 d. Market Links Field services(CII study) 5,526 e. Raman 1,480 f. Boopathy(Electrical worked at new premises) 7,026 350,882 Adjusted in Y. 03-04 against bills raised on NEA o....
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....under:- "5. The last issue is regarding inter-office conversion expenses of .32,613/-. The ld A.R of the assessee has submitted that this is a notional figure taken on the last day of the accounting year and which was reversed on the first day of next accounting i.e. 1.4.2001. So the addition in question for this notional amount is not justified. In the interest of justice, the AO is directed to verify whether this notional amount on account of foreign exchange fluctuation had been neutralized by way of reversal of the entry on 1.4.2001 or not. In case if it is found so, the same should be allowed. As far as the other remaining amount of .2,40,070/- is concerned, the ld A.R. of the assessee has submitted that this amount was written back in the F.Yrs 2000-2001, 2001-02 and 2003-04. However, he has not substantiated by any documentary evidence. Accordingly, the AO is directed to verify the stand taken by the ld A.R,. of the assessee and decide this issue afresh as per law after providing adequate hearing to the assessee." As regards to stale cheques, no details have been furnished and, therefore, no interference is called for with the order of the CIT(A). Ground No.1 is partly....
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....ere is no dispute that if a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee, then it cannot be said that the income reached the assessee's hand. This was so held by the Hon'ble Supreme Court in the case of CIT v. Sitaldas Tirathdas, 41 ITR 367 (SC). The Tribunal in the case of C.C.Chokshi and Co.(supra) has also noted the decision of the Hon'ble Supreme Court in the case of Prince Khandelrao Gaikwar v CIT, 16 ITR 294 at page 373, wherein, it was held as under:- "There is no distinction between a charge created by a decree of court and one created by agreement of parties, provided that by that charge the income from property can be said to be diverted so as to bring the matter within section 9(1)(iv) of the Act." Therefore, as per partnership deed, if some charge has been created then the same has to be discharged by the firm and to that extent, it cannot be said that income has reached the firm's hand. The deed dt.1.4.98 was necessitated on account of retirement of certain partners and agreement had been entered into in respect of uncollected bills etc, w....
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....eping partner and if the widow of such partner there shall be paid to his widow the same sum as she received in the period aforesaid. (iv) At the death of a sleeping partner- who had become a sleeping partner on account of ill-health pursuant to clause 19 hereof and who has not completed 25 years service with the firm or having completed such service has not been a partner for atleast 15 years, then his widow or heirs, executors and administrators would be paid the same amount as was payable to him pursuant to clause 24(2) for a period of 10 years from the date of his death or upto the time the partner would have attained the age of 62 years whichever is lesser. (iii) The following shall be added as sub-clause (cc) to clause 25. If at the date of his death he was a sleeping partner, there shall be payable to his widow or heirs, executors and administrators, in consideration of uncollected bills rendered for fees and unbilled work as at the date he became a sleeping partner, for the period from the date of his death to the end of the accounting year and in the subsequent year (if he should die in the first year after he becomes a sleeping partner) or from the date of his death....
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....e agreement itself. In our opinion, when compared with clause 22 of the partnership deed in the case of C.C.Chokshi and Co.(supra), in substance, there is not much difference because both the clauses primarily create overriding title in favour of outgoing partners. The decision of the Tribunal in the case of C.C.Chokshi and Co(supra) has already been approved by the Hon'ble Bombay High Court. We further find that in following cases also, under similar circumstances, it has been held that an overriding title has been created in favour of outgoing partners: 1) CIT v. Mulla and Mulla and Craigie, Blunt and Caroe, 190 ITR 198 (Bom) 2) CIT v. Nariman L. Bharucha and Sons, 130 ITR 863 (Bom). 3. CIT v. Sitaldas Tirathdas, 41 ITR 367 (SC). 4) CIT v. Crawfort Bayley and Co., 106 ITR 884 (Bom) 5) RSM and Co v. ACIT (ITA No.3269/M/07) In view of the above discussion, this ground is allowed. 13. Apropos Ground No.3, we are of the opinion that the AO while giving effect to this order will examine the assessee's claim regarding TDS and give credit in accordance with law. 14. Ground No.4 is consequential. The AO is directed accordingly. 15. In the result, appeal....