Angels Alluminium Corporation Kolkata

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INCOME TAX APPELLATE TRIBUNAL ?C? BENCH, KOLKATA
(BEFORE HON?BLE SMT. DIVA SINGH, JM & SHRI B.C.MEENA,AM)

I.T.A.No.1667/Kol/2009
Assessment Year : 2005-06

I.T.O., Ward-56(4) -vs- M/s. Angels Aluminium Corpn.
Kolkata Kolkata PAN:AAEFA 5098C
(Appellant) (Respondent)

Appellant by : Shri A.K.Pramanik
Respondent by : Shri R.Salarpuria

O R D E R

Per Smt. Diva Singh, Judicial Member

This is an appeal filed by the Revenue against the order dated 25.06.2009 of

the CIT-(A)-XXXVI, Kolkata pertaining to 2005-06 A.Yr. wherein the following

ground has been raised by the Revenue :-

?1. In the facts and circumstances of the case, the Ld. Commissioner of Income-
tax (Appeals)-XXXVI, Kolkata has erred in allowing the Remuneration and
Interest on Capital to the partners of Rs.120,000/- and Rs.947,487/-
respectively u/s 40(b) in contravention to provisions under section 184)5) of the
I.T.Act.?

2. The relevant facts are that the AO was constrained to pass 144 order holding that

there was repeated non-compliance to statutory notices. Accordingly he disallowed the

claim the amount of Rs.1,20,000/- and Rs.9,47,487/- as remuneration and interest on

capital to the partners respectively u/s 40(b) of the IT Act.

2.1. In appeal before the First Appellate Authority the ld. CIT(A) has decided the

issue as under :-

?They have also furnished copies of original and amended partnership deeds dt.
th th
27 June, 2001 and 8 July, 2004.
th
I have carefully considered the above. The partnership deed of dt.27 June,
2001 has provided for interest on capital at 18% while the amended partnership
th
deed, dt. 8 July, 2004 has provided for payment of salary to working partners
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at Rs.1,20,000/- for the period ended on 31 March, 2005 and from 1.4.2005
onwards at Rs.10,000/- per month per person. In view of the above, there is no
justification for Assessing Officer to disallow of Rs.1,20,000/- and
Rs.9,47,487/- towards remunerations and interest paid to partners. Therefore,
the Assessing Officer is directed to allow the remuneration and interest on
capital to the partners as per Sec.40(b) of the IT Act.?

2.2. Aggrieved by this the revenue is in appeal before us.

3. We have heard the parties before the Bench. On a careful consideration of the

material available on record it is considered appropriate to restore the issue back to the

file of the AO with the direction to decide the same in accordance with law by way of

a speaking order. In the course of hearing it was submitted by the ld. AR that the ld.

CIT(A) (Admn.) has proceeded u/s 263 and thereafter the issue has been set aside to

the file of the AO. Accordingly in the aforementioned facts and circumstances the

departmental appeal is allowed for statistical purposed. Needless to say that the

assessee shall be afforded a reasonable opportunity of being heard

4. In the result the appeal of the revenue is allowed for statistical purposes as per

the pronouncement made in the open court on the date of hearing itself i.e. 01.04.2010.

.

Sd/- Sd/-
(B.C.Meena) (Diva Singh)
Accountant Member Judicial Member

Dated : 01.04.2010.

Copy of the order is forwarded to :-

1. M/s. Angels Alluminium Corporation, 19, Birtish India Street, Kolkata-700069.
2. I.T.O., Ward-56(4), Kolkata
3. C.I.T.(Appeals)-XXXVI, Kolkata 4) C.I.T. Kolkata
5. D.R., ITAT, Kolkata

By Order

Assistant Registrar
I.T.A.T., Kolkata
R.G./P.S.
True copy
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