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2015 (8) TMI 1536 - AT - Income TaxEnhancement by Ld. CIT(A) - no notice required u/s 251(2) was given by the Ld. CIT(A) to the assessee for enhancement - HELD THAT:- We find force in the submission of Ld. DR of the Revenue that in the present case, there is no enhancement by Ld. CIT(A) in respect of disallowance of interest and salaries paid to partners because the same was not allowed by the AO also and therefore, there was no requirement to issue notice u/s 251(2) of the Act by Ld. CIT(A). Therefore, Ground No.1 (a) of the assessee. Allowability of deduction in respect of interest and salary paid by the assessee firm to its partners - HELD THAT:- As in the assessment order, it is observed by the AO that no bills/vouchers and books of account or any other supporting vouchers have been produced before him and therefore, he had no option but to estimate the income to the best of his judgment. He has invoked the provision of Section 144 of the Act although not specifically stated in the assessment order. As per sub section (5) of section 184, where there is on the part of firm any such failure as mentioned in section 144, the firm shall be assessed without allowing deduction of any payment of interest and salary etc. to any partner of the firm in computing the income chargeable under the head business income. Hence, in the facts of the present case, Section 184(5) of the Act is applicable and as a consequence, deduction on account of interest and salary payment to partners is not allowable. Hence, on this issue, we do not find any reason to interfere in the order of the Ld. CIT(A). Accordingly, Ground No. 1 and 2 are rejected. Fresh capital introduced by the new partners who have joined the firm in the present case - HELD THAT:- CIT(A) also confirmed these additions on this basis that during the assessment proceedings or appellate proceedings, the assessee did not furnish their addresses PAN or their confirmation. In view of these facts that acknowledgement of filing income tax return/intimation in respect of four new partners out of six new partners is available in paper book, we feel it proper that this matter should go back to the file of the AO for fresh decision. Credit of TDS - HELD THAT:- There is no mention in the assessment order for allowing lesser amount of credit for TDS. Hence, we feel that on this issue also, the matter should go back to the file of the AO for fresh decision.
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