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2021 (3) TMI 345 - HC - Income TaxReopening of assessment u/s 147 - assessee had claimed excessive deductions u/s 80 IB(10) without providing interest on capital and remunerations to the partners for the respective years under consideration, which had escaped assessment - case of the assessee is that, both the interest and remuneration stipulations were incorporated earlier which contained clause as to payment of interest and remuneration, which was not at all paid to the partners - revenue has considered the partnership deed 23.01.2008 and concluded that, interest and remuneration were payable to the partners - HELD THAT:- Clauses of the partnership deed provided for interest on partner's capital and remuneration, the same is subject to their mutual agreement - clauses contained are only enabling provision not mandatory in nature so as to lead to an inference that, the assessee had to pay interest on capital and remuneration to its partners. Even after 01.04.2009, interest on capital as well as the remuneration were not to be paid to the partners. No material on record to indicate that, the writ applicant has actually received any interest on capital and remuneration from the partnership firm. Record further indicates that, for the assessment year 2010-11[2015 (8) TMI 1160 - ITAT AHMEDABAD] deduction u/s 80 IB(10) was claimed without paying any interest on capital and remuneration to partners and such claim was not disturbed by the assessing officer. In this view of the matter, the conclusion arrived at by the assessing officer that, the assessee has claimed deduction without providing interest on capital and remuneration to partners as per the clause 6 and 7 of the deed, has escaped assessment on account of failure on the part of the assessee in filing of the return of income disclosing fully and truly all material facts are contrary to law and without jurisdiction. We hold that, the contention raised by learned Sr. counsel Mr. Hemani merits consideration that mere incorporation of clauses in the partnership deed for interest on the partner’s capital and remuneration, does not signify that, interest and remuneration is to be paid to the partners mandatorily. The issue involved in the present case is squarely covered by the case of Alidhara Taxspin (P) Ltd. [2017 (5) TMI 1684 - GUJARAT HIGH COURT] and applying the principles of law as propounded by this Court, we hold that, re-opening of the assessment is not justified. - Decided in favour of assessee.
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