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S.R. Batliboi And Co. LLP & Another Versus Asst. Commissioner of Income Tax & Others

2016 (4) TMI 44 - CALCUTTA HIGH COURT

Reopening of assessment - Held that:- The petitioning assessee had to provide for the entire amount due of ₹ 19,20,000/- that accrued to the retired partner irrespective of the amount actually paid upon Accounting Standard-15 coming into effect; but the concerned partner would show only the amount received of ₹ 4,80,000/-. While the figures appear to be mismatched, that is because of the different accounting systems followed by the two assessees. When the two systems of accounting ar .....

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he same, the notice dated March 31, 2014 issued by the assessing officer and all steps taken pursuant thereto for reassessment of the petitioning assessee’s accounts for the assessment year 2007-08 stand set aside. - WP No. 228 of 2016 - Dated:- 21-3-2016 - Sanjib Banerjee, J. ORDER The Court : The petitioners question the propriety of a notice dated March 31, 2014 issued under Section 148 of the Income Tax Act, 1961 for initiating proceedings for reassessment under Section 147 of the Act in res .....

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h attempt at reassessment being challenged by way of WP No.205 of 2013, this Court restrained any final order being communicated on the reassessment without the leave of Court. The matter is pending after filing of affidavits. As far as the present attempt at reassessment is concerned, it pertains to the pension to an erstwhile partner of the petitioner firm. The petitioners claim that since the petitioners referred to the accounts being prepared on accrual basis in the notes appended to the acc .....

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Form No.3CD, the petitioning assessee disclosed the particulars of payments made to the persons specified under Section 40A(2)(b) of the Act. The list of all relevant persons was also disclosed. It was clearly mentioned therein that P. M. Narielvala (since deceased) was an erstwhile partner of the petitioner firm and a sum of ₹ 19,20,000/- was shown to have accrued to the said erstwhile partner on account of pension. The petitioners say that since all material relevant for the purpose was .....

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rtment, it is submitted that even if the petitioning assessee followed the mercantile system of accounting on accrual basis, the deduction of the sum of ₹ 19,20,000/- could not have been made from the profit and loss accounts of the company for the relevant year when, during such year, only a sum of ₹ 4,80,000/- had actually been paid to the erstwhile partner and the balance amount had not been paid but was only notionally provided for. It is evident from the balance-sheet, profit an .....

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