TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 481
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....s. 1,05,140/- based on presumption and surmises and against the settled position. The addition needs deletion. 5. Taking into consideration the legal, statutory, factual and administrative aspects, no determination of income of Rs. 1,05,140/- ought to have been confirmed. The additions need deletion. 6. The Ld. CIT(A) has erred in law and facts in confirming income of Rs. 1,05,140/- without considering that the remuneration paid by the firm to the partner was already shown by the partner in the return income and therefore there was double taxation in making addition in the hands of firm. The addition needs deletion. 7. The Ld. CIT(A) has erred in law and facts in not considering that the guidelines issued by the Hon. Supreme Court providing strict observation and following principals of natural justice. The order passed by the Ld. A.O. needs annulment. 8. The Ld. CIT(A) has further erred in not giving deduction to the amount of remuneration paid to the partners out of income determined at Rs. 1,05,140/-. The same needs deduction. 9. Without prejudice, the intimation made is bad in law and deserves annulment. 10. Without prejudice, no adequate, sufficient and reasonable ....
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....ct is remuneration to the partners and shown by the partners in their respective account. 5. In consequence of the intimation under s.143(1) dated 10/05/2013 wherein the income was accepted at Rs. 1,05,140/- as per return and consequent demand of tax thereon, the assessee moved an appeal before the CIT(A). The CIT(A) however, did not accept the plea of the assessee and declined to grant relief. The process of reasoning for his conclusion is reproduced hereunder:- "5.0 Decision:- 5.1. I have carefully considered the submission of the appellant and perused facts of the case in A.O's order. The order being agitated against is order u/s.14391). The intimation suggest that the income returned by the appellant u/s.139 of Rs. 105135/- was accepted as such (Sr.No.2 of Intimation u/s.143(1). So intimation clearly shows that no alteration was made in the return filed by the appellant. Now it is being claimed that there being no column, the remuneration to the partners (of Rs. 1056135/- divided equally between two partners) could not be claimed and thus to this effect return was not correct. It is being claimed that in "Computation of Income" income was shown as NIL after giving considerat....
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....rived profit of Rs. 1,05,135/-. The same is allocated amongst the two partners as remuneration as under: 1. Shri Surendra Karshandas at 50% - Rs. 52,568/- 2. Shri Vijaykumar Karshandas at 50% - Rs. 52.567/- Total Rs. 1,05,135/- 2.2 The factual position is as under : 1. The assessee firm is doing business on small basis and every year the amount of profit earned is being divided as remuneration to the partners. 2. In A.Y. 2011-12 the book profit of Rs. 1,17,495/- was allocated as remuneration to the partners and hence a return of income showing nil income was filed by the assessee is accepted by the department. Even in earlier years the same position is there. 3. In A.Y. 2012-13 under appeal the assessee earned an amount of Rs. 1,05,135/- which is divided among 2 partners as remuneration as per accounts of the assessee as well as computation of total income in respect of return income. 2.3 Thus, the profit is being distributed amongst partners every year. This has also been accepted by the department every year. 3. This year in the return of income the amount of Rs. 1,05,135/- was shown and as per computation of income attached herewith after ....
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....Karshandas at 50% - Rs. 52,568/- 2. Shri Vijaykumar Karshandas at 50% - Rs. 52.567/- Total Rs. 1,05,135/- 5.2 Copy of acknowledgement of income filed by both the above partners along with their computation of income showing this remuneration shown by them is also submitted herewith for kind perusal. [page No: 10 to 15] 5.3 Thus there is also double taxation of the same amount which is also not permissible. 6. Even subsequent to A.Y. 2012-13, after allocation of remuneration to the partners, the income of the assessee as being assessed and accepted at Nil income. Thus only in A.Y. 2012-13, the above error is there. 7. It may also be mentioned that the return of income for A.Y. 2012-13 does not contain any specific column to show remuneration to the partners. In A.Y. 2015-16, the same is inserted which is enclosed herewith for kind perusal. 8. It is therefore humbly prayed that the income determined at Rs. 1,05,135/- may kindly be directed to be deleted and may kindly be directed to be taken at Nil. Alternatively, the matter may kindly be restored back to the Ld. A.O. to allow deduction of remuneration paid to the partners for after verification by ....
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....e powers to admit points of law and admit claim for exemption based on materials on record. [Para 9] In view of the above, the AO is directed to treat the aforesaid receipt as capital receipt which was received by him as per the order of the hon'ble high court. {Para 9}. 2. National Thermal Power Co. Ltd. v/s. CIT - 229 ITR 383 - Hon. S.C. Held : Under s. 254 the Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. There is no reason to restrict the power of the Tribunal under s. 25....
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....he purpose of determining the true figure of the asseessee's taxable income and the consequential tax liability. Merely because the assessee fails to claim the benefit of a set off, it cannot relieve the ITO of his duty to apply s. 24 in an appropriate case. Encl: As Above. Sd/- D.R. Adhia - AR" 8. The Ld.DR, on the other hand, submitted that the Department has simply accepted the return filed by the assessee without making any adjustments therein. Therefore, there is no occasion to raise any grievance on the intimation. No fault can be found with the Department for accepting the income offered by the assessee. Also, the scope of section 143(1) does not permit the Department to get into the debate as proposed on behalf of the assessee. 9. We have carefully considered the facts and circumstances of the case as narrated in the aforesaid paras. The short grievance of the assessee is that the return filed by the assessee itself ought to have been processed differently or an opportunity before raising the demand ought to have been given. It is pleaded that the demand raised on the assessee is without granting the benefit of payment of remuneration to its partners which is a....