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Shri Ijyaraj Singh Versus The Commissioner of Income Tax, Kota

Revision u/s 263 - allowably of expenditure - Held that:- The assessee has stated that he was partner in various partnership firms. In respect of the expenses, the assessee also stated in that reply about the expenditures incurred and deduction claimed. The AO after considering the submissions allowed the claim of the assessee in respect of deduction/expenditure. Now the question arises is whether the AO erred in allowing the expenditure. The ld. Counsel for the assessee has placed reliance on t .....

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ve their income assessed in accordance with law, that is to say, under section 28 of the I.T. Act, 1961. In making that assessment, a partner of the firm, being an assessee, is entitled to all the deductions allowable under the Act. In order to earn the income as a partner of a firm, a partner of a firm has to do some work and he has to incur certain expenses, e.g., holding consultation for the work of the firm at one’s residence or acts done in order to facilitate or earn the income as a partne .....

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or deduction to the extent of tuition fee alone. Therefore, the AO erred in allowing the deduction on gross amount. But looking to the amount involved, in our considered view, the ld. CIT should have given direction to the AO as he is empowered to do so to restrict the claim to the extent of allowable deduction instead of setting aside the assessment order. As per section 263, the ld. CIT is empowered to modify the assessment. Thus the direction issued by the ld. CIT is modified. The AO is direc .....

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unds of appeal :- The learned Commissioner of Income Tax, Kota erred in law as well as on facts in passing the order under section 263 of I.T. Act 1961 without pointing out any particular error in the order of Assessing Officer passed on 19.12.2012 which is passed after proper enquiry, discussions, taking evidence etc. etc. during the assessment proceedings. The commissioner of Income Tax failed to appreciate that Assessing Officer has completed the assessment after detail enquiry, examination o .....

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n levied treating as business income. So also on consideration and on the basis of objection of Audit Party the taking of action under section 263 is also not justified. Therefore order passed by the Assessing Officer is not erroneous nor prejudicial to the interest of Revenue. The detail facts have been given in the Statement of Facts annexed herewith separately. It is, therefore, prayed that order passed under section 263 by Commissioner of Income Tax, Kota is illegal, unwarranted and deserves .....

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the notice that the assessee has claimed expenditure to the tune of ₹ 4,33,718/- against the income from interest and remuneration arises from different partnership firms and also on the basis that the deduction claimed under section 80C of ₹ 80,605/- was excessive as allowable deduction under section 80C comes to ₹ 56,749/-. In response to the notice issued under section 263, the assessee made written submissions dated 9th December, 2014. The ld. CIT did not accept the content .....

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by ld. CIT is not justified on the fact that the ld. CIT has failed to consider the binding precedents and also failed to appreciate the facts in right perspective. The ld. Counsel submitted that the ld. CIT has initiated proceedings under section 263 when an objection was raised by the Audit Party. He submitted that this basis is contrary to the judicial precedents. The ld. Counsel further submitted that the assessee being a public person and Member of Parliament also having business interest i .....

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ed in the case of CIT vs. Ramnik Lal Kothari, 74 ITR 57 (SC). Reliance is also placed on the judgment of Hon ble Rajasthan High Court rendered in the case of CIT vs. Jabarmal Dugar, 84 ITR 158 (Raj.). 3.1. Ld. Counsel submitted that another reason mentioned in the notice is that deduction under section 80C was claimed excessively. The ld. Counsel submitted that in respect of specific query in point no. 7, evidence of deduction claimed u/s 80C has been given. The ld. Counsel relying upon the judg .....

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xcessive claim of deduction is concerned, the assessee has conceded the fact that it has claimed excessive deduction. He further submitted that a perusal of the assessment order would make it clear that the AO has not applied his mind and no enquiry was made with regard to the claim of the assessee related to expenditure and the deduction. 3.3. In rejoinder, the ld. Counsel for the assessee submitted that the AO has in fact made enquiry. It is not necessary that AO should record his finding on e .....

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lable on record and gone through the orders of the authorities below. There is no dispute with regard to the position of law that powers conferred under section 263 can be invoked if the ld. CIT finds that the order passed by the AO is erroneous and prejudicial to the interests of the revenue. It is also settled position of law that absence of any of these conditions would make the order under section 263 as unjustified and illegal. In the case in hand, the first ground of invoking provisions of .....

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Station, Kota and Toshakhana, besides interest remuneration from M/s. Mahalaxmi Association, Kota and Toshakhana. All these firms are old firms and assessed to tax since a long time. The same partnership deed continued. From that it is clear that the assessee has stated that he was partner in various partnership firms. In respect of the expenses, the assessee also stated in that reply about the expenditures incurred and deduction claimed. The AO after considering the submissions allowed the cla .....

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ts held that - When the income of a partnership is allocated t the different partners of a firm, the partners are entitled to have their income assessed in accordance with law, that is to say, under section 28 of the I.T. Act, 1961. In making that assessment, a partner of the firm, being an assessee, is entitled to all the deductions allowable under the Act. In order to earn the income as a partner of a firm, a partner of a firm has to do some work and he has to incur certain expenses, e.g., hol .....

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ion 80C was allowed by the AO without making enquiry with regard to the allowability of such claim. As per the ld. CIT, the assessee was entitled for deduction of ₹ 56,749/- out of ₹ 80,605/-, hence the deduction of ₹ 23,856/- was not allowable and the AO allowed such deduction. 4.1. The contention of the assessee is that on this ground also the ld. CIT was not justified in invoking the provisions of section 263. It is submitted by the ld. Counsel for the assessee that there is .....

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