TMI Blog2014 (10) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... ried to take advantage of delay - The Revenue also could not point out any mala fide on the part of the assessee. CIT(A) ought to have examined whether there is a deliberate attempt on the part of the assessee to avoid liability of tax in making belated claim and thereby filing the appeal after prescribed period - the delay in filing of the appeal is about a month - taking a liberal view the delay is condoned and the appeal is to be remitted back to the CIT(A) for fresh adjudication – Decided in favour of assessee. - I.T.A. No. 821/Ahd/2013 - - - Dated:- 15-10-2014 - Shri Anil Chaturvedi And Shri Kul Bharat,JJ. For the Appellant : (None) Written submissions For the Respondent : Shri B. Kulshrestha, Sr.DR ORDER Per Shri Kul Bharat, Judicial Member : This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-I, Surat ('CIT(A)' in short) dated 21/01/2013 pertaining to Assessment Year (AY) 2008-09. The assessee has raised the following grounds of appeal:- 1. The assessment of assessee firm for AY 2008-09 was completed by Dy CIT Circle-6 Surat on 21.12.2010 under s. 143(3). The assessment order was ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eared on behalf of the assessee, but the written submissions are placed on record. A request has been made by the authorized representative of the assessee to decide the present appeal on the basis of the written submissions. Therefore, the appeal was taken up for hearing in the absence of the assessee. 3. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment. A survey action u/s.133A of the Income Tax Act,1961 (hereinafter referred to as the Act ) was conducted at the construction site premises of the assessee on 19.02.2008. During the course of survey proceedings, a statement under oath of Shri Dahyabhai Manibhai Patel, partner of the assessee-concern was recorded and he has voluntarily disclosed income of ₹ 82,00,000/- as unaccounted income of the assessee relating to the financial year under consideration. During the course of assessment proceedings, it was noticed by the AO that in place of ₹ 82 lacs, the income was shown as ₹ 32 lacs. Subsequently, the assessee voluntarily came forward and suo motu filed a revised P L account offering the entire amount of ₹ 82 lacs to tax as income from undisclosed sources, ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected against the order of CIT(A) passed on 21.01.2013 raising following grounds of appeal: i. The Id. CIT(A) erred in law and on facts in not condoning the delay through there was sufficient cause for delay in filing the appeal. The factual position about appellant being under bonafide belief that its rectification application will be considered and grievance resolved by the AO being not in doubt, the above cause ought to have been considered judiciously in the best interest of justice. ii. That the DCIT erred in not passing order of rectification u/s. 154 as per time limit prescribed u/s. 154(8) i.e. within 6 months in which rectification application is made. The assessee has made rectification application on 11/01/2011. Non passing of order u/s. 154(8) either rejecting or accepting the application should be adhered to as held in S. Lakha Singh (2011) 139 TTJ (Asr) 636. iii. The Id. CIT(A) also erred both in law and on facts in holding that on merit, the claim of enhanced deduction of partners remuneration was rightly disallowed. The Id. CIT(A) failed to appreciate that AO having accepted the revised profit and loss account and revised income of the firm furnished to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by the assessee and upon detection, Sh. D. M. Patel (Partner) has come forward with rectified figures of income. 5. Also that in the course of proceedings, the assessee firm has filed a return of income on 26.11.2010 vide Acknowledgement No. 0601000085 showing income of ₹ 70,83,940/-. Hence, as per facts of the case, initially, in the original return of income the assessee had shown disclosed income of ₹ 32.00,000/- and the gross profit shown was to the tune of ₹ 47,93,007/-. However, subsequently, the assessee voluntarily came forward and suo moto filed a revised P L account offering the entire amount ₹ 82,00,000/- to tax as income from undisclosed sources, over and above regular income and offered gross profit of ₹ 97,93,007/- and net taxable profit of ₹ 37,85,435/- in the P L account. 6. As broadly stated above, in the course of assessment proceedings, assessee offered the enhanced income of ₹ 50 lacs and also claimed the further deduction of the salary paid to partners of ₹ 17 lacs. With the revised return, assessee also filed the computation of revised total income and justified that remuneration paid of ₹ 20 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing officer which was filed immediately on 11.01.2011 after receipt of the assessment order. Assessee also filed the reminders for disposal of applications vide letters dated 16.08.2011 and 13.09.2011. So the Id. CIT(A) should have condoned the delay in filing the appeal. 11.2 As per clause (ii) of S. 40(b) of the I. T. Act, 1961, any payment of remuneration to any partner who is working partner is to be disallowed if it is not authorized, or is not in accordance with the terms of partnership deed. The clause (v) of said section provides the ceiling for payment of the remuneration to the partners. The partnership deed was executed on 06.02.2003 when the firm came into existence on 01.04.2002. The clause 4 of the said partnership deed provides following: 4. The remuneration payable to the working partners shall be computed in the following manner as laid down in section 40(b) of the Income Tax Act, 1961 and such amount shall be distributed between the said working partners in equal proportion: Book Profit Remuneration 1. First ₹ 75,000/- 90% of Book Profit 2. Second &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 17 lacs paid to working partners. 11. 6 So assessee's contention is that that there is no bar to the assessee for making an additional claim in the course of assessment proceedings and even assuming that assessing officer is not entitled to consider the claim and to adjudicate the same, the appellate authorities are bound to entertain such additional claim. The reliance is placed on the decision of High Court of Bombay in case of CIT v/s. Pruthvi Brokers Shareholders (P) Ltd. - 349 ITR 336 (Bom.) where the decision of the Supreme Court in case of NTPC v/s. CIT - 229 ITR 383, Jute Corporation of India Ltd. v/s. CIT Anr - 187 ITR 688 and ACIT v/s. Gurjargravures P. Ltd. -111 ITR 1 (SC) were followed. 11.7. The assessing officer cannot play hot and cold water at the same time. On one hand he accepted the additional income offered by the assessee in the course of assessment proceedings and on the other hand he disallowed the remuneration from enhanced income of ₹ 50 lacs. The criteria for payment of the remuneration as laid down in the partnership deed was income and even the clause (v) of S. 40(b) provides ceiling based on the income. 11.8 Even otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roach has to be adopted. The Hon'ble Supreme Court in the case of N.Balakrishnan vs. M.Krishnamurthy reported at (1998) 7 SCC 123 has held as under:- It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant, the court shall compensate the opposite party for his loss. 5.2. The Revenue could not point out that there was any deliberate act for delay or the assessee has tried to take advantage of delay. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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