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TMI Blog2013 (12) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... e original return of income - The findings of the AO are supported by the details filed in the return of income by the partners in which they have declared the amount of salary received from the assessee firm and as such specific material was available with the Revenue Department to prove that the assessee paid salary to these partners for which deduction has been claimed – Decided against assessee. - IT Appeal No. 313 (Agra) of 2012 - - - Dated:- 15-2-2013 - BHAVNESH SAIN AND A.L. GEHLOT , JJ. For the Appellant : Mahesh Agarwal. For the Respondent : K.K. Mishra. ORDER:- PER : Bhavnesh Saini This appeal by the assessee is directed against the order of ld. CIT(A), Gwalior dated 29.04.2012 for the assessment year 2006-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound at the premises of the assessee. Statement of the partner of the assessee firm was recorded in which he has accepted that no books of account have been prepared. Thereafter, several statutory notices were issued time to time requiring the assessee to produce complete details, but none have been complied with by the assessee and accordingly, show cause notice u/s. 144 was also issued as to why income of the assessee be not computed exparte u/s. 144 of the IT Act. It was intimated that it is not possible for the assessee to produce the desired details as the concerned partner is not available. Thus, the assessee did not comply with any of the statutory notices. Therefore, the AO on the basis of the material on record passed exparte asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was produced at the assessment stage despite giving opportunity. The ld. CIT(A) in the absence of any details was of the view that no business expenditure is allowable to the assessee firm and accordingly in the absence of any evidence for payment of salary and remuneration to the partners, addition was confirmed and appeal of the assessee was accordingly dismissed. 4. The ld. Counsel for the assessee submitted that no expenses have been disallowed by the AO and no specific notice u/s. 144 has been given. PB-3 is the letter of the AO which did not contain any specific material for making addition against the assessee. He has relied upon the decision of Hon'ble Kerala High Court in the case of T.C.N. Menon v. ITO [1974] 96 ITR 148 in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment : Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment : Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.] (2) The provisions of this section as they stood immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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. (4) Where any such change had taken place in the previous year, the firm shall furnish a certified copy of the revised instrument of partnership along with the return of income for the assessment year relevant to such previous year and all the provisions of this section shall apply accordingly. (5) Notwithstanding anything contained in any other provision of this Act, where, in respect of any assessment year, there is on the part of a firm any such failure as is mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 142(1) of the IT Act and also failed to comply with the notice u/s. 144 of the IT Act. Therefore, the provision of section 144 of the IT Act has been rightly invoked against the assessee for framing the exparte assessment order. Sub-section (5) of section 184 of the IT Act is exception to Rule and would clearly disentitle the assessee for claiming deduction by way of salary and remuneration etc. in case the assessee made a failure as provided u/s. 144 of the IT Act. Similarly, the assessee has also failed to prove other ingredients of section 184 of the IT Act before the AO. Therefore, the provisions of section 185 of the IT Act would also apply in the case of the assessee. Thus, according to section 184(5), the assessee would not be entit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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