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TMI Blog2012 (12) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowed as deduction to the assessee - assessee has to establish that in addition to Rs.8,08,995.22, any other expenditure was incurred on the vehicles and the same were not debited by the assessee but were debited by the so called contractors, that deduction should be allowed to the assessee for such expenses if the assessee can satisfy the A.O. about allowability of such expenses - ground is allowed for statistical purposes. Disallowance u/s. 40(a)(ia) of the I.T.Act – Held that:- No tax was deductible by the assessee in view of the certificate issued by the A.O. of these subcontractors u/s 197(1) of the Income tax Act, 1961, no disallowance is justified u/s 40(a)(ia) of the Income tax Act, 1961 but since we have confirmed the disallowance for the reasons stated in the above para, this ground is of academic interest only - appeal of the assessee stands allowed. - I.T.A. No. 1446/ Ahd/2008 - - - Dated:- 31-1-2012 - Shri D. K. TYAGI And Shri A. K. GARODIA, JJ. Appellant by: Shri Sunil Talati, AR Respondent by: Shri James Kurian, DR ORDER PER SHRI A. K. GARODIA, AM:- This is assessee s appeal directed against the order of Ld. CIT(A) Gandhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he firm underwent a change in its constitution in as much as three partners have retired from the firm and three new partners have joined w.e.f. 01.04.2004. He further noted that the assessee was required to file certified true copies of the reconstituted partnership deed along with the return of income as required u/s 184(4) of the Income tax Act, 1961. He further noted that as per Section 185 of the Income tax Act, 1961, no deduction by way of any payment of interest, bonus, commission and remuneration whatsoever nature called made by a firm to a partner of the firm which has not fulfilled conditions laid down in Subsection (4) of Section 184 of the Income tax Act, 1961 should be allowed. In this manner, the A.O. made disallowance ofRs.4,08,653/- in respect of the partners interest expenditure and partners salary expenditure. Being aggrieved the assessee carried the matter in appeal before Ld. CIT(A) but without success and now, the assessee is in further appeal before us. 3. It is submitted by the Ld. A.R. that the copy of partnership deed is available on pages 32-38 of the paper book and the same was submitted to the A.O. in the course of assessment proceedings along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of reassessment proceedings holding the defect was a rectifiable defect. In these facts arid circumstances of the case, we are of the considered opinion that it is not the case of the Revenue that no partnership deed existed during the year under consideration. The only dispute is that the copy of the partnership deed was not certified by both the partners and filed / along with the return of income. The copy filed was certified by one of the partners. In these facts and circumstances of the case, we are of - the considered opinion that the defect of not filing copy of the certified by both the partners is a curable defect. of section 184 of the Act are directory and not mandatory as held by the Hon'ble Gujarat High Court in the case of Billimora Engineering Mart Vs CIT 156 ITR 153 (Guj). Hence, we find no good reasons to interfere with the findings of the CIT(A) and the grounds of appeal of the Revenue are dismissed. 6. In the present case also, the A.O. has treated the assessee as firm only; and made the disallowance of interest and salary paid to the partners. Hence, the facts in the present case are similar to the facts of this case and hence, by respectfully following the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -65 of the paper book. He also submitted that on pages 53-58 of the paper book are the copies of the application made by these sub-contractors to the respective A.O.s in Form 13C to obtain the certificate for not deducting TDS and such certificates u/s 197(1) of the Income tax Act, 1961 were issued by the A.O. to these sub-contractors on 23.04.2004 and hence, it cannot be said that this transaction of sale and lease back is an afterthought. He submitted that in view of these certificates issued by the A.O. of these sub-contractors, the assessee was not required to deduct TDS and hence, for this reason, no TDS was deducted by the assessee and no adverse inference can be drawn against the assessee. It is also submitted that the vehicles were registered with ONGC and the assessee has declared the income in respect of these vehicles and hire charges were paid by the assessee to these sub-contractors and, therefore, it is genuine business expenditure and hence, should be allowed. It was also submitted that even if it is held that disallowance is justified of hire charges of Rs.24,22,085, matter should be restored back to the file of the A.O. to allow expenses on operation of these three ..... X X X X Extracts X X X X X X X X Extracts X X X X
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