9911796707
TMI Blog2007 (10) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... quently, he disallowed the interest and remuneration paid to the partners. The ld. CIT(A) followed the decision of the ITAT, Visakhapatnam Bench in the case of ITO v . Shri Sai Wines [IT Appeal No. 139 (Vizag) of 2006, dated 10-7-2006] and directed the Assessing Officer to treat the assessee as a firm and granted consequential relief with regard to the deductions allowable towards interest and remuneration paid to the partners. 3. Aggrieved by the order of the CIT(A), the ld. Departmental Representa-tive contends that there is violation of law as envisaged in rule 39 of AP Indian Liquor and Foreign Liquor Rules, 1970 and thus, the constitution of the firm becomes null and void . Therefore, the assessee is not entitled to be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. In this regard, ld. Counsel for the assessee relied upon the provisions of section 184(3) of the Income-tax Act ( the Act ) which read as under : "184(3): Where a firm is assessed as such for any assessment year, it shall be assessed in the same capacity for every subsequent year if there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which the assessment as a firm was first sought." Ld. counsel submitted that in the years under consideration there is no change in the constitution of the firm or the shares of the partners and, thus, the Assessing Officer is not empowered to change the status without disturbing the order passed in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able wastage of time, talent and energy of the Assessing Officers discharging the onerous public duty of collection of revenue. In the case of ITO v. Bir Engg. Works [2005] 94 ITD 164 (Asr.), the Special Bench of the Tribunal observed in para 11.5 of its order, as under: "Thus, from the above, it is clear that instructions issued by the Board including those prescribing the monetary limit of tax effect for filing the appeals before the Tribunal, High Court and Supreme Court are binding on the Income-tax authorities. This view also finds the support from the commentary of Law and Practice by Kanga, Palkhivala and Vyas where the authors have expressed the view that the instructions of Board prescribing the monetary limit for filing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ila Srivastav, ITO [1996] 217 ITR 741 (SC), 3. CIT v. Rangila Ram [2002] 254 ITR 230 (SC). 9. Section 184 of the Act was amended from time to time and we are concerned with the section as amended with effect from 1-4-1993 whereby norms for granting the status as a firm to assessees were modified. As could be noticed from section 184 of the Act, so long as a partnership is evidenced by an instrument and the individual shares of the partner are specified in this instrument, the status has to be treated as a firm. The provisions of the said section applicable prior to 1-4-1993 empower the Assessing Officer to enquire into the genuineness of the firm and its constitution as specified in the instrument of partnership and if it is found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case as they pertain the assessment years prior to 1993-94 and there is no discussion with regard to the amended provisions of section 184 of the Act in those decisions. The order of the ITAT A Bench, Hyderabad in the case of Raaga Wines ( supra ), is an ex parte order, wherein the Bench followed another decision of the Division Bench in the case of Vidyasagar Reddy ( supra ), a copy of which was not placed before me and hence it is not known as to whether there was any discussion with regard to the amended provisions of the Act. Even in the case of Raaga Wines ( supra ) except merely stating that the division Bench order has to be preferred over the order passed by a single member, it is not clear as to what were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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