9911796707
TMI Blog2014 (12) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... wo sections contain any provision to the effect that the deductions u/s 32 to 38 are deemed to have been made - once a provision of that nature is not incorporated u/s 144 and 145 of the Act, the contention of the revenue cannot be accepted - once it was held that even where the assessment is done u/s 145 of the Act, normal deductions are to be allowed, there is no way that the AO could have denied deduction of the salaries to the partners and interest on financial charges - It is not even mentioned that the claims are not factually correct – thus, the order of the Tribunal is upheld - Decided against revenue. - I.T.T.A No. 287 of 2003 - - - Dated:- 11-12-2014 - L. Narasimha Reddy And Challa Kodanda Ram,JJ. For the Appellant : Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The respondent carried the matter in appeal to the Commissioner of Income Tax (Appeals), Visakhapatnam. The Commissioner directed the assessing officer to take the estimated net profit at 11.5% as against 12.5%. He has also allowed deduction of interest on capital arranged by the partners and amount paid as salaries to the partners. Deduction of interest on loans was disallowed. Therefore, the respondent carried the matter in further appeal to the Tribunal. Following the order passed by the Hyderabad Bench in I.T.A No.1057/Hyd/1988, the Tribunal allowed deduction of interest on other loans also. Hence, this appeal by the Revenue. Sri S.R. Ashok, learned Senior Standing Counsel for the Revenue submits that once the assessment is shown und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first item of the income. Obviously, by taking recourse to Section 145 of the Act and thereby to Section 144 of the Act, he assessed the income at 12.5% on the total receipts from that source. It is important to note that he allowed depreciation from the estimated net profit, but disallowed the deduction of interest on capital and salaries paid to the partners. In the appeal preferred by the respondent, the Commissioner granted relief to the extent of reducing the estimated net profit by 1% and allowed deduction of (a) interest on capital arranged by partners and (b) salaries paid to the partners. He disallowed interest on other loans. The Tribunal granted that part of the relief also. The entire controversy turns around the question as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sections 144 and 145 of the Act, the contention of the department in this behalf cannot be accepted. The first question is answered in the affirmative. Answer to the second question, would in fact depend upon the answer of the first question. Once we hold that even where the assessment is done under Section 145 of the Act, normal deductions are to be allowed, there is no way that the assessing officer could have denied deduction of the salaries to the partners and interest on financial charges. It is not even mentioned that the claims are not factually correct. We, therefore, answer the second question also against the Revenue and in favour of the assessee. The Tribunal has taken the correct view of the matter. We, therefore, di ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
