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2015 (12) TMI 454 - AT - Income TaxAssessment of partnership firm as AOP - non filing of partnership deed - Held that:- The copy of the partnership deed should be filed alongwith the return but in case it was not filed alongwith the return, the AO should have asked the assessee to file the copy of the partnership deed. When the assessee filed the same before the ld. CIT(A), the ld. CIT(A) must have accepted the same, enclosing the copy of the partnership deed. Thus it is merely technical requirement so that the Revenue must have aware of that a partnership has genuinely been constituted. Therefore, in the interest of justice and in view of the fact that the provision of section 184(2) is not mandatory and is only directory as the similar language has been used u/s 80IA(7) set aside the order of the ld. CIT(A) on this issue and held that the assessee be assessed as ‘firm’ not as ‘AOP’. - Decided in favour of assessee. Disallowance of remuneration and interest to the partners in accordance with the partnership deed - Held that:- The remuneration and interest to the partner was disallowed by the AO as the assessee has been assessed as AOP not as a firm. Since while disposing off the ground No. 1 to 5, as already held that the assessee be assessed in the status of the firm accordingly direct the AO to allow interest and salary to the partners subject to the compliance of the conditions as stipulated u/s 40(b) of the Act. - Decided in favour of assessee. Estimation of the profit in the case of assessee by applying the proviso to section 44AD - Held that:- It is an undisputed fact that the assessee failed to produce the bills and vouchers to prove the genuinity of the expenses although the assessee has produced the books of account. This is also the fact that in the case of sub-contractor the margin of the profit is less as the margin in respect of contractor is being shared between the main contractor and the sub-contractor. The assessee has submitted a copy of order dated 11.05.2011 of the ld. CIT(A) in which he has estimated the profit rate @ 5% of the total receipt. In the absence of any cogent material being brought on record from either of the side it is appropriate that the gross profit in respect of a sub-contractor be estimated @ 4% - Decided partly in favour of assessee.
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