Non-consideration of Partnership Deed and Supplementary Deed furnished by Assessee: ITAT sets aside Assessment Order [Read Order]

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT), set aside assessment order as there was no proper of the Partnership Deed and the Supplementary Deed furnished by assessee.

The assessment was re-opened u/s 147 of the Income Tax Act, 1961. A notice u/s 148 of the Act was issued and served upon the assessee,Satish Kumar Contractor. In response to the statutory notices, Counsel for the assessee attended the proceedings.

The basis of re-opening of the assessment as stated in the reasons for re-opening the assessment is stated that during the course of assessment proceedings in the case of M/s Satish Kumar Contractor for Ay 2008-09, it was noticed by the AO that he had filed return of income for AY 2008-09, declaring income of Rs.5,27,035 on gross receipt of Rs.1,23,97,850 from civil contract.

However, it was found that as per Form 26AS, TDS was reflected in the case of Firm M/s Satish Kumar Contractor. The assessee has filed explanation stating that there was Supplementary Partnership Deed dated 01.04.2007 made by Clause 5 of the Deed was mandate.

For this explanation, it was further stated that the assessee has not carried out any work for the year under consideration. Therefore, the assessee cannot be fastened the liability of taxes. This explanation of the assessee was not accepted by the AO. He therefore, computed the business income of Rs.16,11,151 and further interest income of Rs.18,045. Thus, the AO assessed income at Rs.16,29,200 of the assessee.

Aggrieved against this, the assessee preferred appeal before CIT(A) who after considering the submissions, sustained the addition and dismissed the appeal of the assessee. Hence the appeal has been preferred.

A Single Bench consisting of Kul Bharat, Judicial Member held that “Considering the facts available on record, I am of the considered view that the authorities below ought to have given clear finding regarding the terms of Partnership Deed and Supplementary Deed as furnished by the assessee. Even, CIT(A) failed to advert the submissions of the assessee. Therefore, the impugned order is set aside and the issue is restored to the file of AO to decide it afresh after giving adequate opportunity of hearing to the assessee.”

To Read the full text of the Order CLICK HERE

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