TaxTMI 
TaxTMI 
2024 (10) TMI 419
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....e facts and in the circumstances of the case as well as law on the subject, the reopening of the appellant's case u/s 148 of the Act is bad in law and without jurisdiction. 2. On the facts and in the circumstances of the case as well as law on the subject, the Learned Addl/JCIT(A)-5, Delhi erred in confirming the addition made by the Income Tax Officer, Ward 3(2)(5), Surat to the tune of Rs. 6,59,035/- by treating alleged interest on capital receivable from the firm of M/s Shrusti Corporation without appreciating the facts of the case. Your appellate therefore prays that looking to the facts and circumstances of the case, the addition made by the learned A.O. to the tune of Rs. 6,59,035/- and confirmed by the learned Addl/....
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....under Section 80IB was allowed by the ld. CIT(A) and on further appeal before the Tribunal, the appeal of revenue in all three years were dismissed vide consolidated order dated 27/08/2019 passed in ITA No. 2575, 2963 and 1856/Ahd/2016. Thereafter, the case of firm Shrusti Corporation was reopened under Section 148 of the Act on 26/03/2018 wherein addition was made on account of interest on capital contribution to partners and remuneration was added aggregating of Rs. 2.06 crores thereby reduced the claim of deduction under Section 80IB of the Act. The appeal of said firm against making such addition thereby in reducing the deduction of claim under Section 80IB(10) of the Act is pending before the ld. CIT(A). The case of assessee was also r....
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....h the firm. The wording in the relevant clause is that "partnership firm may pay interest at the maximum allowable rate as per provisions of the Income Tax Act on partner's capital lying with the firm." A bare reading of such clause make it clear that it is option in the partnership firm whether to pay interest or not to pay interest to the partners and the Income Tax Officer cannot sit on the chair of the partnership firm to make compulsory payment to the partner on their capital. To support his submission, the ld. AR of the assessee relied upon the following decisions: * CIT Vs Mundra Packaging Industries Tax Appeal No. 615-617 of 2006 (Guj) * M/s Sagar Foods Vs ITO ITA No. 750/Ahd/2014 * ITO Vs M/s Twina Polypl....
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....ion of tax is not permissible. 4. In the short rejoinder submission, the ld. AR of the assessee submits that the issue directly or indirectly is related with the deduction under Section 80IB (10) of the Act. 5. I have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. I have also deliberated on various case laws relied by the ld. AR of the assessee. I find that the Assessing Officer made addition on account of interest on capital of assessee lying with the partnership firm namely Shrusti Corporation. The Assessing Officer made addition of 12% of interest on capital of assessee aggregating of Rs. 54.91 lacs. Before the ld. CIT(A), the assessee contended that the firm has ....