2018 (12) TMI 684 - ITAT CHENNAI

Addition of payment to retired partners u/s.37(1) on identical issue /facts with respect to payment made to retired partners that too in the case of the assessee the Tribunal considered the factual matrix and considered the decision of the Tribunal on identical facts / issue for ay 2011-12, wherein the payment of expenditure allowable u/s.37(1) of the Act has been considered. The Tribunal also considered the partnership deed wherein identical reference has been made in various clauses with respect to determination and the payments to retiring partners or the spouse /nominees of the deceased partners and thereafter reached to the particular conclusion. - Decided in favour of assessee.

Addition towards advances received from clients - Held that:- In the case of the assessee itself for ay 2011-12, the Tribunal has deliberated upon identical issue and considering the decision from Hon’ble Delhi High Court in the case of Dinesh Kumar Goel [2010 (10) TMI 287 - DELHI HIGH COURT] and arguments from both sides including the decision in the case of A.F.Ferguson & Co. [2014 (7) TMI 1285 - BOMBAY HIGH COURT] another decision from Hon’ble P&H High Court in the case of CIT vs. Punjab Tractors Co-operative Multi-purpose Society Ltd. [1997 (8) TMI 37 - PUNJAB AND HARYANA HIGH COURT], affirmed the stand of the ld.CIT(A).

Reopening of assessment - reason to believe that income has escaped assessment - incorrect claim of expenditure as a revenue expenditure towards the pension paid to retired partners - Held that:- ase was reopened with the issuance of notice u/s,.148 on 13.3.2015 as the ld. A.O found that the assessee incorrectly claimed the expenditure as a revenue expenditure towards the pension paid to retired partners. As per the partnership deed also, it was found that money received from the clients has been shown as advances from clients instead of offering the same as income. Thereafter, the assessee in response to the notice offered the total taxable income of Rs,13,56,49,603/- on 29.4.2015. The ld.AO communicated the reasons for reopening. The assessee filed its objections vide letter dated 18.2.2016. The ld.A.O disposed of the objections of the assessee by a speaking order on 10.03.2016. We note that the contention of the assessee that the reopening of the assessment was merely done on the basis of the change of opinion and based on audit objections has been duly discussed.

Thus, considering the foregoing decisions and the amended provisions with effect from 01.04.1989, we are of the considered opinion that the ld.First Appellate Authority is justified to confirm the reopening as valid. Thus, the Cross objections of the assessee for assessment year 2010-11 with respect to validity of reopening of assessment u/s.147 of the Act is held to be valid.