Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (3) TMI 763 - AT - Income TaxDisallowance of interest expenses property purchased in the name of partners - Held that:- The contentions of the assessee is accepted - Under the Partnership Act, the partners are individually known as Partners and collectively known as Firm - Hence, the partners are entitled to hold the properties belonging to the partnership firm in their individual name, provided it is explicitly made clear that the partner is so holding the asset - the assets of M/s Venkiteswara Hospital were purchased in the name of three persons, who are also partners of the assessee firm - The intention to transfer the assets and liabilities purchased from M/s Venkiteswara Hospital to the assessee firm were made clear by the agreement dated 28.5.2005 entered between the three persons (in whose name the assets of M/s Venkiteswara Hospital was purchased) and all the partners of the assessee firm. The value of assets brought in by the partners need not always be credited to their respective capital account - It is only one of the methods of accounting for bringing the assets and liabilities into the books of the firm - the assessee has paid the net value assets of Rs.35.00 lakhs directly to the concerned partners - Thus it amounts to crediting the partners account with their respective share and immediately making payment of the same to them - the submissions made by the assessee require verification at the end of the assessing officer thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue. Disallowance of depreciation Held that:- The AO had disallowed the claim of depreciation on the reasoning that the assessee firm cannot be considered as the beneficial owner of the assets purchased from M/s Venkiteswara Hospital - while dealing with the issue relating to the disallowance of interest claim, the matter of verification of submissions made by the assessee is remitted to the assessing officer thus, this matter is also required to be remitted back to the AO for fresh adjudication Decided in favour of Revenue. Disallowance of depreciation on assets purchased from old welcare hospital Held that:- It is not necessary that the assets of a partnership firm should be distributed only upon the dissolution of the firm, i.e., even during the currency of the partnership firm, the partners may take over the assets with the concurrence of the all other partners - according to the assessee the two partners of the assessee firm have taken over the assets and have also introduced them in the books of the assessee firm - When the partners bring the assets and introduce the same as the assets of the assessee firm, then the assessee firm shall become owner of those assets - the conditions prescribed u/s 32 of the Act have been satisfied there is no reason to disallow the claim of depreciation - all the assets have been brought into the books of the assessee firm at the WDV value it is not clear as to whether this fact was examined by CIT(A) - this aspect requires verification at the end of the AO thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue. Disallowance of repairs and maintenance expenses Held that:- The decision in assessees own case for the earlier assessment year has been followed, the expenditure incurred by the assessee is for the purpose of expansion of profit making apparatus - the expenditure has to fall within the capital field the Tribunal has already given a finding that the expenditure incurred on renovation of the building is a capital expenditure thus, the order of the CIT(A) set aside and the matter is remitted back to the AO for adjudication Decided in favour of Revenue. Unexplained sundry creditors balances Differences in closing balances Held that:- All the creditors are trade creditors, i.e., they are not cash credits though the CIT(A) may not be empowered to set aside the matter, yet in the absence of any other details relating to this creditor requires fresh consideration - the closing balance shown in the accounts of the assessee and the statement furnished by the parties did not tally - the decision taken by the CIT(A) is reasonable - Since the assessee did not prefer appeal against the said direction, the assessee is not aggrieved by the decision of CIT(A) - the outstanding balance to the extent shown in the statements of accounts furnished by the parties have to be considered as proved thus, there is no reason to interfere in the order of the CIT(A) - Decided partly in favour of Revenue. Disallowance u/s 40(a)(ia) of the Act Interest u/s 234B of the Act - Held that:- The assessee has furnished copy of letter furnished by Dr. Pradeep and also copy of return of income filed by him to show that Dr. Pradeep had disclosed the receipts from the hospital of the assessee - The documents were filed to show that the responsibility to declare the OP & IP collections noticed in the seized records lie upon the concerned doctors - these documents were not considered by the AO the matter requires adjudication as to the applicability of section 40(a)(ia) of the Act thus, the matter remitted back to the AO for fresh adjudication Decided in favour of Revenue.
|