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TMI Blog1978 (7) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IT Act in this year by holding that the act of the assessee in making clearly inadmissible claims in the return does not amount to gross or wilful neglect on the amount to gross or wilful neglect on the part of the assessee covered by the provisions of s.271(1)(c)?". Asst. yr. 1967-68 "Where on the facts and in the circumstances of the case the Tribunal is correct in law in cancelling the penalty of Rs. 83,530 imposed by the IAC of Income-tax under the explanation to s.27(1)(c) of the IT Act in this year by holding that the act of the assessee in making clearly inadmissible claims in the return does not amount to gross or wilful neglect on the part of the assessee covered by the provisions of s.271(1)(c)? 2. As in our opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Salaries to partners: . . . Shri Kishan Lal Rs. 12,000 . . Shri Sudershan Km. Rs. 10,800 22,800 25,268 . . . 1,98,778 Deduct interest received from partners: . . . Shri Kishan Lal, HUF Rs. 12,541 . . Shri Kishan Lal(Ind.) 22,801 . . Shri Sudershan Kumar(HUF) 5,403 . . Shri Sudershan Kumar(Ind.) 11,404 . . Shri Jagmohan Kalra 2,649 . 54,738 . Net Assemble Income Rs.1,43,980 It was urged that although the assessee had claimed interest received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the ITO. So far as the adjustment entries are concerned, the IAC held that the very note of deduction of Rs. 54,798 from the income for profit and loss account proves the malafides of the assessee firm. The assessee according to the I.A.C., was represented by M/s. Remanand Aiyar Company. Chartered Accountants who are so experienced that it hardly lies in the mouth to say that they felt "that the interest from the partners should be dealt with in the same manner as interest paid to the partners". The facts that the ITO proceeded to compute the income by reference to the net profit as per profit loss account and did not allow exemption in respect of income earned by the firm from the partners, and that the auditors did not dispute the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded the disallowance of interest received from the partners of Rs. 54,798. Though claimed by the assessee as an allowable deduction but not considered in his assessment order by the ITO. Consequently the ITO did not consider the assessee's claim for deduction as an act of concealment. In the circumstances, the IAC has no jurisdiction to consider the item of deduction which was not at all considered or adjudicated upon by the ITO as an Act of Concealment. The AAC further granted relief of Rs.75,155 and the balance amount of Rs. 83,430 represented nonconsideration of receipt from partners of Rs. 54,798,The disallowance of Rs.3,238, disallowance of out brokerage of Rs. 5,000,Disallownace of cash credits of Rs. 13,000 and a few more disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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