9911796707
TMI Blog2015 (9) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... ply with the notices issued by the Assessing Officer under S.143(2) and this position clearly evident from the record is not disputed even by the learned counsel for the assessee. We therefore, agree with the stand of the revenue on this issue that the provisions of S.184(5) are clearly applicable in the case of the assessee for the year under consideration and the learned CIT(A) is not justified in directing the Assessing Officer to allow deduction on account of interest and remuneration paid to the partners from the profit estimated at 15% of the gross commission amount by invoking the provisions of S.144. We accordingly reverse the impugned order of the learned CIT(A) granting relief to the assessee on this issue, and allow ground no.2 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent : Shri A. V. Raghuram ORDER Per P.M.Jagtap, Accountant Member : This appeal is preferred by the Revenue against the order of the learned Commissioner of Income-tax(Appeals) VI, Hyderabad dated 29.11.2012. 2. The assessee in the present case is a partnership firm, which is engaged in the business of distribution of BSNL prepaid cards. The return of income for the year under consideration was filed by the assessee on 15.10.2008 declaring total income of ₹ 3,59,100. During the course of assessment proceedings, notices under S.143(2) and S.142(1) were issued by the Assessing Officer fixing the case of the assessee for hearing from time to time. The said notices, however, remained un- complied with by the assessee and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and remuneration of ₹ 3,12,000 paid to partners, net income of ₹ 3,59,096 was declared in the return filed for the year under consideration. The assessee, however, expressed its inability to furnish the relevant details and documents in support of the expense claimed due to the closure of business and death of Managing Partner, and urged the learned CIT(A) to determine its income by estimating the profit on the basis of information already placed on record. 4. After considering the submissions made on behalf of the assessee as well as the material available on record, the learned CIT(A) held that in the absence of reliability of books of account produced by the assessee, the profit of the business was required to be determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein it is clearly stated that if the assessment is completed u/s. 144 of the I.T. Act, remuneration and interest paid to partners should be disallowed. 3. The learned CIT(A) ought not to have rejected the books of account and estimated the income because as the assessee is unable to produce bills/vouchers in support of various expenses claimed, it is a case where expenses should have been disallowed instead of estimating the income. 4. The learned CIT(A) has erred in applying estimation @ 15% because by following CIT(A)'s estimation, the net income works out to ₹ 4,15,732/- only, which is only 5.5% of the Commission received as against 10 to 15% discussed by the CIT(A) in Para 6.4 of the order. 5. The appellant crave leave to add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.144 in respect of any assessment year, in the assessment of the firm, no deduction by way of any payment of interest, salary, bonus, commission or remuneration, by whatever name is called, paid by such firm to its partners, shall be allowed, in computing the income chargeable under the head 'Profits and gains of business'. It is further provided in sub-section (5) of S.184 that any such interest, salary. Bonus, commission shall not be chargeable to income tax under clause (v) of S.28. 7. At the time of hearing before us, the learned counsel for the assessee has contended that there was no failure on the part of the assessee firm as mentioned in S.144 and therefore, the provisions of S.184(5) are not applicable in the case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be taken as the income of the assessee by disallowing the entire expenditure. In our opinion, the proper course available in such a situation is to reject the books of account and estimate the income of the assessee on the basis of material available on record and the learned CIT(A) has taken a very fair and reasonable view on the basis of material available on record, including the past history of assessee's case to estimate the income of the assessee from business at the rate of 15% of the gross commission amount. We therefore, find no justifiable reason to interfere with the the impugned order of the learned CIT(A) on this issue and upholding the same, we dismiss ground No.3 of the Revenue's appeal. 9. As regards ground No.4 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
