9911796707
|
Home
Issues:
1. Treatment of a sum received by the assessee for acting in a film produced by a firm in his capacity as a partner. 2. Disallowance of the sum under section 40(b) and section 67 in the firm's assessment. 3. Invocation of section 155 to substitute the inclusion of firm's income in the assessee's assessment. 4. Jurisdiction of the Assessing Officer under section 155 to consider the assessee's claim. 5. Applicability of the Full Bench decision of the Patna High Court in a similar case. Detailed Analysis: 1. The appeal involved a dispute regarding the treatment of a sum of Rs. 50,000 received by the assessee for acting in a film produced by a firm in which he was a partner. The assessee contended that the sum was not assessable in the year under consideration as he maintained his accounts on a cash basis and no actual payment had been made to him by the firm. The Income-tax Officer accepted the returned income of the assessee but later invoked section 155 to include the firm's income in the assessee's assessment. 2. In the firm's assessment, the sum of Rs. 50,000 was treated as remuneration paid to the assessee and disallowed under section 40(b) and section 67. The Commissioner of Income-tax (Appeals) upheld the inclusion of the firm's income in the assessee's assessment, citing the provisions of section 67(1)(b) regarding the computation of a partner's income. 3. The Tribunal considered the method of computing a partner's income under section 67, which provides for deductions based on various criteria such as interest, salary, commission, or other remuneration paid to a partner by the firm. The Tribunal emphasized that the assessee, in this case, was entitled to receive the sum for acting in a film and not in his capacity as a partner, thus subjecting the income to other provisions of the Income Tax Act. 4. The Tribunal deliberated on the jurisdiction of the Assessing Officer under section 155 to consider the assessee's claim and concluded that the Assessing Officer should have allowed the assessee to raise objections when the matter was first put against him. The Tribunal held that the CIT (Appeals) erred in rejecting the claim of the assessee and distinguished a Full Bench decision, emphasizing that the assessee could claim the amount as not taxable based on the precedent. 5. Ultimately, the Tribunal directed the Income Tax Officer to exclude the sum of Rs. 50,000 from the income of the assessee, allowing the appeal in favor of the assessee based on the interpretation of relevant provisions and legal precedents.
|
