9911796707
TMI Blog2022 (11) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... nment is altogether wrong and misleading. 3. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining addition of Rs. 74,31,417/- made on account of notional interest calculated at the rate of 12% on the credit balance of Rs. 6,19,28,475/- in capital account with M/s. Shree Infratech, a partnership firm in which the appellant company is a partner. 4. BECAUSE the learned Commissioner of Income Tax (Appeals) has failed to appreciate the facts that partnership firm, M/s. Shree Infratech has neither paid nor credited any interest on capital account as agreed upon by partners, in terms of partnership deed. 5. BECAUSE the partnership firm, M/s. Shree Infratech has neither claimed nor allowed any interest on partners capital account as per the provision of under section 40(b) of the Income Tax Act, 1961, therefore not liable to be taxed under section 28(v) in the hands of the partner. 6. BECAUSE the learned Commissioner of Income Tax (Appeals) has failed to appreciate the facts that as per the provision of section 28(v) interest due or received on capital account by partner is chargeable under the head income from business only to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate of the Authorized Representative to seek the adjournment of hearing fixed on 9.6.2022 placed at page No. 5 and 6 of the paper book. Thus, the learned AR has submitted that when the assessee filed an application alongwith medical certificate for seeking adjournment of hearing then the impugned order passed by the CIT(A) ex parte without considering the said request of adjournment is in violation of principles of natural justice and liable to be set aside. He has then referred to the petition filed by the assessee under section 154 of the Income Tax Act on 5.7.2022 placed at page No. 1 to 4 of the paper book and submitted that the assessee has prayed for restoration of the appeal of the assessee to be decided on merits after considering the facts already narrated in the statement of facts as part of Form No. 35. The learned AR has pointed out that the CIT(A) has passed the impugned order even without considering the fact as explained by the assessee in the statement of facts which were available with the CIT(A). He has further submitted that the assessee also explained all these facts before the AO in the reply dated 15.12.2019 and as per para 6 of the said reply, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rship firm has not claimed the interest as deduction. He has also referred to the order of the CIT(A) and submitted that despite various opportunities given by the CIT(A) the assessee failed to appear or make any submissions therefore, the CIT(A) is justified in deciding the appeal ex parte. The learned DR has thus submitted that the matter may be remanded to the record of the CIT(A) for fresh adjudication after considering the record which has been filed by the assessee first time before the Tribunal. 5. In a rejoinder, the learned AR has submitted that all the notices issued by the CIT(A) were during the COVID-19 Pandemic period and the assessee has duly filed an application online alongwith the medical certificate for seeking adjournment of the hearing of the appeal on 9.6.2022 which is the last date of hearing fixed by the CIT(A) before passing the order on 24.6.2022. Thus, the learned AR has submitted that without considering the request for adjournment, the CIT(A) is not justified in dismissing the appeal by ex parte order. He has contended that even in the ex parte order, the CIT(A) ought to have decided the appeal on merits after considering the facts explained by the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if mutually agreed by executing the supplementary deed. Moreover, as per the provision of section 28(v) interest on capital received from partnership firm is chargeable to income tax under the head "Profit and gains of business or profession" provided that interest or part thereof has been allowed to be deducted under clause (b) of section 40. For the sake of ready reference the provision of section 28(v) is reproduced here as under: "28. The following income tax be chargeable to income-tax under the head "Profit and gains of business or profession" X X X X X X X X (v) any interest, salary, bonus, commission or remuneration, by whatever name called, due to or received by, a partner of a firm from such firm: Provided that where any interest, salary, bonus, commission or remuneration, by whatever name called, or any part thereof has been allowed to be deducted under clause (b) of section 40, the income under this clause shall be adjusted to the extent of the amount not so allowed to be deducted. In view of the above categorical provision of the act no income on account of interest on capital is chargeable under this section until and unless the firm has claimed the said i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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