TMI Blog2013 (12) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... hibit constitution of partnership firm for carrying liquor business, so also licenses obtained by individuals can be converted into partnership firm on compliance of certain requirement - The assessee firm is eligible for registration u/s 184/185 and consequently eligible for deduction u/s 40(b) in respect of salary, interest as per law – Decided against Revenue. - IT Appeal No. 6112 (Delhi) of 2012 - - - Dated:- 15-2-2013 - Rajpal Yadav And Shamim Yahya, JJ. For the Appellant : Satpal Singh. For the Respondent : Ankit Gupta ORDER:- PER : Rajpal Yadav The revenue is in appeal before us against the order of ld. CIT (A) dated 27.8.2012 passed for A.Y. 2009-10. 2. In the first ground of appeal, revenue has pleade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-05, 2005-06 and 2006-07. The dispute travelled up to the Tribunal and the Tribunal has deleted the disallowance. He placed on record, copy of the Tribunal's order right from A.Ys. 2003-04 to 2006-07. 6. We have duly considered the rival contentions and gone through the records carefully. Section 145 has a direct bearing on the controversy, therefore, it is salutary upon us to take note of this provision. 145(1) Income chargeable under the head 'Profits and gains of business or profession' or 'Income from other sources' shall, subject to the provisions of sub-section (2), be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. (2) The Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, i.e., if the Assessing Officer is unable to deduce the true income on the basis of method of accountancy followed by an assessee then he can reject the book results and assess the income according to his estimate or according to his best judgment. The Assessing Officer in that case is required to point out the defects in the accounts of assessee and sought explanation of the assessee qua those defects. If the assessee failed to explain the defects then on the basis of the book results, income cannot be determined and Assessing Officer would compute the income according to his estimation keeping in view the guiding factor for estimating such income. 6.2 Before ld. first appellate authority, assessee has furnished details of the expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w them. This is more important when in a row in the last 4-5 years, similar disallowances were made by him but deleted by the ld. CIT (A) as well as ITAT. Therefore, if we weigh the finding of the Assessing Officer extracted (Supra) vis-a-vis the view taken by the ld. CIT (A) which is a higher authority in the pedestal of the hierarchy, the scale would tilt in favour of the ld.. first appellate authority, no interfere is called for in the order of ld. CIT (A) on this issue, the first ground of appeal is rejected. 7. In the next ground of appeal the grievance of revenue is that ld. CIT (A) has erred in treating the assessee as a firm instead of an AOP treated by the Assessing Officer, therefore allowing the relief of ₹ 22,36,311/- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment in sections 184/185 w.e.f. 1-4-1994, as mentioned above. In view thereof we hold that the assessee firm is eligible for registration u/s 184/185 and consequently eligible for deduction u/s 40(b) in respect of salary, interest as per law. In arriving this view we also find support by the order of ITAT Bangalore Bench in the case of DCIT v. H.E.D. Bros. Co. (Supra), which is to be followed by us. This ground of assessee for all the assessment years in question is allowed. 9. The Assessing Officer has not disputed with the fact that assessee has been treated as a firm in the order of the ITAT but he refused to follow the order of the ITAT on the ground that this order has been challenged before the Hon'ble High Court. The observ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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