(BEFORE HON?BLE SMT. DIVA SINGH, JM & SHRI B.C.MEENA,AM)
Assessment Year : 2005-06
I.T.O., Ward-56(4) -vs- M/s. Angels Aluminium Corpn.
Kolkata Kolkata PAN:AAEFA 5098C
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
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.
27 June, 2001 and 8 July, 2004.
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
deed, dt. 8 July, 2004 has provided for payment of salary to working partners
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.
(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