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TMI Blog2020 (10) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... ar of Firm, Pune, Maharashtra, PAN has also been allotted as firm and even in the assessment order, the status of the firm is mentioned as that of the partnership firm. Department is accepting all the genuineness of existence of the partnership firm and only for this technical aspect of deed executed in the lessor denomination stamp paper has framed the assessment treating the assessee as AOP. Revenue Authorities may call upon the assessee in due course for rectification of this technical defect. In the totality of facts and circumstances and on examination of this issue as afore-stated, we are of the considered view that the assessee is duly constituted partnership firm. Hence, we set aside the order of the Ld. CIT(Appeals) on this issue and direct the Assessing Officer to provide appeal effect accordingly. Thus, Ground Nos.1 and 2 raised in the appeal are allowed. Disallowance u/s 40(a)(ia) - TDS on architect fees and labour charges deducted on the same but was not paid till 31.03.2012 - assessee‟s Counsel stated that the said amount had not been deposited in the Government‟s account - scope of amended provisions of Section 40(a)(ia) - HELD THAT:- One final op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed as AOP. 3. On the facts and in the circumstances of the case and in law the Learned Assessing Officer erred in disallowing a sum of ₹ 6,40,459/- by invoking the provisions of section 40(a)(ia) of the Income Tax Act, 1961 by disregarding appellants contention in this regards. 4. On the facts and in the circumstances of the case and in law the Learned CIT(A) erred in enhancing the income by ₹ 3,76,000/- by rejecting appellant submission made in this regard. 5. On the facts and in the circumstances of the case and in law the Learned CIT(A) erred in proposing an enhancement of income by ₹ 3,76,000/-, the action is beyond the power of Learned CIT(A) as no addition can be made for new source of income by the CIT(A) therefore the entire action of enhancement needs to be quashed. The appellant craves for to leave, add, alter, modify, delete above ground of appeal before or at the time hearing, in the interest of natural justice. 2. In respect of Ground Nos. 1 and 2, the facts are that during the assessment proceedings, it was noted by the Assessing Officer that in the P L account, the assessee has debited a sum of ₹ 25,00,000/- as pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income of the assessee. 4. The Ld. CIT(Appeals) on analyzing this issue agreed with the findings of the Assessing Officer and read Section 184 of the Act along with provisions of Indian Partnership Act, 1932 and the Bombay Stamp Act, 1958 observed that the partnership deed had to be executed on stamp paper not less than ₹ 500/-. That further, the Ld. CIT(Appeals) also referred to Section 35 of the Indian Stamp Act which specified that the authorized person to receive evidence in form of an instrument will only be admitted by such authorities as evidence if the said instrument is duly stamped. The Ld. CIT(Appeals) at Para 6.5 of her order held that since the partnership deed is executed on stamp paper of ₹ 200/- as against ₹ 500/- required under the Bombay Stamp Act, 1958 such evidence is therefore, liable to be rejected u/s.35 of the Indian Stamp Act as requirement of law is not fulfilled. The Ld. CIT(Appeals) placed reliance on the decision of the Hon‟ble Apex Court in the case of Biharilal Jaiswal Etc. Vs. Commissioner of Income Tax (1996) 217 ITR 746 wherein it has been held that One arm of law cannot be utilized to defeat the other arm of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership firm in the records of the Assistant Registrar of firm, Pune and while granting registration, the Assistant Registrar of firm did not object to any of the clause of the partnership deed and only query was raised regarding the registration fees of ₹ 1500/- which was deposited and the assessee was asked to send the money order for that purpose. Even the stamp duty on the partnership deed was accepted by the Assistant Registrar of Firms, Pune. These submissions made by the Ld. AR was not contested by the Ld. DR at the time of hearing. 7. The Hon‟ble Bombay High Court in the case of Chhotalal Devchand Vs. CIT, 34 ITR 351, in respect of Income Tax Act, 1922 dealing with the same issue of determining validity of partnership firm had observed that so long as the terms specified in any document which goes to constitute the instrument of partnership, the condition of the Income Tax Act, 1922 is satisfied. This decision of the Hon‟ble Bombay High Court was later on referred in the case CIT Vs. New Life Construction Co., 107 ITR 361 wherein again the Hon‟ble Bombay High Court has upheld the validity of partnership firm by going into the depth of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this case of the assessee, substantively nothing has been brought against the assessee by the Revenue Authorities. 8. That further in the decision of the Hon‟ble Apex Court, it concerns about the registration of a partnership firm whereas, in this case, firm is already registered under the Assistant Registrar of Firm, Pune, Maharashtra, PAN has also been allotted as firm and even in the assessment order, the status of the firm is mentioned as that of the partnership firm. Therefore, the Department is accepting all the genuineness of existence of the partnership firm and only for this technical aspect of deed executed in the lessor denomination stamp paper has framed the assessment treating the assessee as AOP. The Revenue Authorities may call upon the assessee in due course for rectification of this technical defect. In the totality of facts and circumstances and on examination of this issue as afore-stated, we are of the considered view that the assessee is duly constituted partnership firm. Hence, we set aside the order of the Ld. CIT(Appeals) on this issue and direct the Assessing Officer to provide appeal effect accordingly. Thus, Ground Nos.1 and 2 raised in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing through video conference, the Ld. AR at the very outset submitted one final opportunity may be given and that the assessee has got evidences in this regard and the matter may be remanded to the file of the Assessing Officer for adjudication and the assessee would submit all the details/evidences in this regard before him. 13. The Ld. DR raised no objection on the submissions put forth by the Ld. AR of the assessee. 14. We have perused the case records and heard the rival contentions. We have also analyzed the facts and circumstances on this issue. After hearing the parties herein, we are of the considered view that one final opportunity should be provided to the assessee for proper verification of facts whether TDS were deducted or whether the same were deposited in the Government account and also for the fact that the Ld. DR did not raise any objection, we restore this matter to the file of the Assessing Officer for verification as directed above and adjudicating the matter while complying with the principles of natural justice. Thus, Ground No.3 raised in appeal by the assessee is allowed for statistical purposes. 15. Ground No.4 and 5 pertains to the enhancement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional amount of ₹ 3,76,000/- declared to have been received in cash by the assessee is formed part and parcel of such additional income offered for taxation by the assessee. However, none of the parties herein could provide any evidence to show the veracity of the statement made by the Ld. AR. 19. The Ld. DR submitted that this issue may also be remanded to the file of Assessing Officer for verification on these aspects. 20. We have perused the case records and heard the rival contentions. It is clear that if in the additional income offered for taxation, the said amount of ₹ 3,76,000/- is not found to be included then that would be taxed separately. But on the other hand, if the contention of the Ld.AR is found correct then already the said amount has faced taxation. The Assessing Officer shall verify accordingly. This issue is therefore restored to the file of the Assessing Officer for verification and adjudication while complying with the principles of natural justice as directed hereinabove. Thus, Ground Nos. 4 and 5 raised in appeal by the assessee are allowed for statistical purposes. 21. In the result, appeal of the assessee is partly allowed f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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