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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 ..... nsel for the assessee seeks permission to withdraw the application for raising the additional ground of appeal. The same is accordingly dismissed as withdrawn. 3. Briefly, the facts of the case are that the assessee filed return of income on 30.03.2007 showing loss of Rs. 2097/-. No trading account, profit & loss account and balance sheet were filed with the return of income. Deficiency letter was issued to the assessee but it was not complied with by the assessee to remove the defect in the return of income. Therefore, the same return was treated as invalid and was also intimated to the assessee as such. Simultaneously, the notice u/s. 142(1) was issued on 19.03.2008 requiring the assessee to file the return of income for the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; (i) Smt. Pooja Bhatnagar Salary Rs.72,000/- (ii) Shri Rachit Bhatnagar Remuneration Rs.24,000/- (iii) Shri Anurag Bhatnagar Remuneration Rs.24,000/- The AO, therefore, treated the same as unexplained expenditure u/s. 69C of the IT Act, as no return of income was filed. Therefore, addition of Rs.1,20,000/- was accordingly made. Addition was challenged before the ld. CIT(A) and it was submitted that the order of the AO is non-speaking and no details were provided for making addition and the remuneration is allowable u/s. 40(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e why on the materials gathered by the ITO, his total income should not be assessed in the manner proposed by the ITO. He has further submitted that the conditions of section 69C are not satisfied in this case because no proper explanation of the assessee was called for and there should be actual expenses incurred by the assessee so that addition could be made. In the case of the firm, as assessed by the AO, the deduction should be allowed as such. On the other hand, the ld. DR relied upon the orders of the authorities below. 5. We have considered the rival submissions and the material on record. The relevant provisions to deal with the matter in issue are reproduced as under. Section 144 of the Act provides as under : & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the making of an assessment under this section.] (2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year. Section 184 of the IT Act provides as under : 184.(1) A firm shall be assessed as a firm for the purposes of this Act, if- & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 section 144, the firm shall be so assessed that no deduction by way of any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such firm to any partner of such firm shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession" and such interest, salary, bonus, commission or remuneration shall not be char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 entitled for deduction by way of salary and remuneration. These provisions have no concern whatsoever even if the status of the assessee is noted as 'firm' in the body of the order. The entire crux of the facts has to be applied against the relevant provision of law for making assessment. Since the assessee did not produce any evidence or material at any stage and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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