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TMI Blog2012 (12) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... t 'the Act' For the sake of convenience and brevity, since the only issue involved in all these cases is that of claim under Sec.40(b) of the Act, we are taking up ITA NO.880/Mds/2012 as lead case. 2. Before proceeding further, we notice that the appeal has been filed after delay of 2053 days in filing. In support thereof, the assessee has filed condonation petition in the shape of affidavit which reads as under :- "This solemn affidavit executed on this day the 14th day of April 2012 at Chennai by Dr.George Nilankavil S/o Late L.V. Neelankavil aged 69 years and residing at T-73, Anna Nagar Chennai - 600 040 in his capacity as the managing partner of M/s. Centre for Individual and Corporate Action a firm comprised of himself and three oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that the honourable Tribunal be pleased to condone the delay of 2054 days noticed in filing the appeal in the circumstances explained. Solemnly affirmed and stated on oath this day the 14th day of April 2012 at Chennai." Whilst pressing the condonation petition, the Authorised Representative before has to peruse the relevant correspondence dated 10.2.2012 between the assessee and the CIT, Chennai and submitted that the delay in filing the appeal may be condoned as the assessee is not at fault. It has been further submitted by relying on the averments made(as reproduced herein above) that the appeal is liable to be admitted/decided on merits. 3. The Departmental Representative, on the other hand, has submitted that the CIT(Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved is in terms of expenditure on overheads and establishment expenditure. At the same time, net profit applied at 80% by the Assessing Officer seems to be on a very high side. But the net profit adopted by the ld.CIT(Appeals) is on the lower side. Keeping all the circumstances of the case in view, we think net profit of 40% would definitely meet the ends of justice. We also agree with the contention of the ld. AR that this rate of net profit can be applied only to the gross professional recipients and not on all the credit entries appearing in the bank statements and therefore we decline to interfere in the order of the ld. CIT(Appeals)." 5. Thereafter, the Assessing Officer again took up he matter and issued notice to the assessee. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee as well as on merits. In our opinion, the following issues arise for our adjudication :- a) Whether the petition filed by the assessee seeking condonation of delay of 2053 days in filing the appeal is liable to be accepted? b) Whether the CIT(Appeals)'s order confirming the findings of the Assessing Officer in rejecting assessee's claim under Sec.40(b)B is to be upheld or modified as per the respective stands of the parties? 10. We have duly perused the relevant contents of the condonation petition reproduced herein above (supra) as well as the merits of the case have also been examined. In our considered opinion, in the condonation petition filed by the assessee, there is no satisfactory explanation of delay in filing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the ''Act, so, in the larger interest of justice, we also propose to decide the case on merits. As we notice, the assessee, after the remand order (supra), for the first time has raised its claim under Sec.40(b) of the Act which stands rejected by the Assessing Officer and confirmed by the CIT(Appeals). It emerges that while rejecting the assessee's claim, the main reason (apart from technicalities of non-maintainability) is that there is no evidence by way of books of accounts etc. in support. Undoubtedly, Sec.40(b) of the Act grants relief to an assessee firm regarding certain claims pertaining to remuneration of salary, bonus, commission etc., paid to its partners. But at the same time, the provision is not absolute. The necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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