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TMI Blog2023 (12) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... By the impugned order, the 1st respondent has rejected the request of the petitioner with the following observations:- "3.1. It is a fact that the firm M/s. Selvam Motors has paid interest to the tune of Rs. 23,80,631/- to the assessee on his capital contribution being one of the partners. The payment of interest on capital contribution is in excess of 12% as specified under section 40(b)(iv) of the Act and therefore, the Assessing Officer has rightly disallowed a sum of Rs. 11,90,315/-, in assessment order u/s. 143(3) r.w.s 147 of the Act in the case of M/s. Selvam Motors on 13.12.2019. Here, it is pertinent to mention that the disallowance made in the case of Firm is on account of violation of provision of section 40(b)(iv) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order and prayed for allowing the Writ Petition. 6. On the other hand, the learned Senior Standing Counsel for the respondents would submit that the impugned order is well reasoned and does not require any interference. 7. It is submitted that payment of interest on capital contribution in excess of 12% as specified in Section 41(4) of the Act, was disallowed vide Assessment Order dated 13.12.2019 in the hands of the Partnership firm namely, M/s.Selvam Motors. Hence, the income in the hands of the petitioner towards interest on capital cannot be disturbed or revised and therefore prayed for dismissal of the Writ Petition. 8. In this connection, the learned Senior Standing Counsel for respondents has drawn attention to the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a firm from such firm : Provided that where any interest, salary, bonus, commission or remuneration, by whatever name called, or any part thereof has not 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 " 13. An exception has been provided to Sub-Clause (v) to Section 28 of the Income Tax Act, 1961. Proviso to Sub-Clause (v) to Section 28 of the Income Tax Act, 1961 reads as under:- Provided that where any interest, salary, bonus, commission or remuneration, by whatever name called, or any part thereof has not been allowed to be deducted under clause (b) of Section 40, the income under this clause shall be adjusted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as such amount exceeds the amount calculated at the rate of twelve per cent simple interest per annum; or (v) any payment of remuneration to any partner who is a working partner, which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as hereunder:- (a)on the first Rs. 3,00,000/- of the book-profit or in case of a loss Rs. 1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of Rs. 23,80,631/-. 18. The petitioner appears to have filed an appeal against the re-assessment order dated 30.12.2019 before the Commissioner of Income Tax (Appeals). Meanwhile, the petitioner opted to settle the dispute under the Vivad Se Vishwas Scheme (VSVS). Therefore, the appeal filed by the petitioner was dismissed as infructuous on 16.11.2021 by the Commissioner of Income Tax (Appeals). 19. It is in this background the petitioner has filed an application on 13.12.2021 under Section 264 of the Income Tax Act, 1961 to revise the assessment order without specifying whether order dated 30.11.2016 passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961 to be revised or the re-assessment order dated 13.12.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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