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2020 (3) TMI 282

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..... interest and remuneration to partner’s have been allowed. The same is in consonance with the case history. Therefore, on the facts and circumstances of the case, we direct Ld. AO to adopt the income at ₹ 1,87,524/- and recompute assessee’s tax liability. The appeal stands partly allowed. For AY 2007-08 we find that the approach of Ld.CIT(A), in this year, was substantially correct. As per the Tribunal’s order dated 18/09/2015, the income was to be reduced by ₹ 25 Lacs. However, the observation that deduction of interest of ₹ 5 Lacs was not claimed by the assessee is not correct since upon perusal of financial statements as placed on record, it is quite discernible that that assessee has claimed deduction .....

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..... #8377; 20,00,000/- as per directions given in Hon ble ITAT order. 3. Ld. CIT(A) erred in law and on facts in directing AO to modify order giving effect to the order of Hon ble ITAT by making addition of ₹ 5,94,107/- income from other sources that was never subject matter of rectification application filed by the applicant. 4. Ld. CIT(A) further erred in law and on facts in directing AO to once again add income of ₹ 5,94,107/- already reduced by AO from computation while making effect to the order of Hon ble ITAT. 5. Ld. CIT(A) erred in law and on facts in enhancing income computed by AO while giving effect to the order of Hon ble ITAT that is beyond scope of proceedings u/s 154 of the Act. 6. Ld. CIT(A) erred in law and on facts .....

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..... Lacs; (ii) business income of ₹ 5.79 Lacs. These items, in the opinion of Ld. CIT(A), were to be added back over and above the assessed income since these remained to be added back. 3.3 We find that observation with respect to first item i.e. other income of ₹ 5.94 Lacs was not added back by Ld.AO, was correct but the observation with respect to second item of ₹ 5.79 Lacs was not correct since this amount was, in fact, added by Ld.AO while computing assessee s income. Another mistake noted by us is that the total of these two items would be ₹ 11.73 Lacs and not ₹ 11.33 Lacs as computed by Ld. CIT(A). 3.4 Consequently, the assessee sought rectification of appellate order dated 21/10/2010 by way of rectification .....

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..... g the income to ₹ 25.99 Lacs. In other words, the adjustment of ₹ 5.79 Lacs was deleted. 3.9 The assessee challenged exercise of revisional jurisdiction u/s 263 before this Tribunal vide ITA No.1507/Ahd/2011 order dated 28/11/2014 wherein the revisional order was canceled on the principle of merger. 3.10 Consequent to cancelling of order u/s 263 by Tribunal, the order dated 15/11/2013 was modified on 02/06/2015 re-determining the income at ₹ 21.47 Lacs so as to nullify the effect of directions given u/s 263. This was the latest order quantifying assessee s income before passing of the order by Tribunal on 18/09/2015. 3.11 The order giving effect to the order dated 18/09/2015 passed by Tribunal, was passed by Ld. AO on 25/0 .....

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..... ordinate bench had already adjudicated the matter of quantum additions vide order dated 18/09/2015 and the same was to be followed in spirit. As per this order, since the income were assessed on estimated basis, separate additions of ₹ 20 Lacs over and above the assessed income was uncalled for. Both the lower authorities were bound to follow the same. We find that Ld.CIT(A), at para 4.1 of the impugned order, has correctly ascertained assessee s income at ₹ 1,87,524/- which was in consonance with the directions of Tribunal order dated 18/09/2015. The said computation comprised-off of estimated income @3%, other income as per financial statements and disallowance u/s 40A(3). Against the same, deduction of interest and remunerati .....

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..... ef of ₹ 25 Lacs as per the directions of the Tribunal. However, regarding deduction of ₹ 5 Lacs representing interest on capital, it was observed that assessee did not claim any deduction and therefore, Ld. AO was directed to withdraw the same if consequential interest was not shown by the partners in their respective returns of income. Aggrieved, the assessee is under further appeal before us. 6. Upon due consideration, we find that the approach of Ld.CIT(A), in this year, was substantially correct. As per the Tribunal s order dated 18/09/2015, the income was to be reduced by ₹ 25 Lacs. However, the observation that deduction of interest of ₹ 5 Lacs was not claimed by the assessee is not correct since upon perusal o .....

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