Karnataka High Court
The Commr Of Income Tax Hubli vs M/S Hotel Ashok Lamington Road on 20 September, 2008
Bench: V.G Sabhahit, S.N.Satyanarayana
EN THE: HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD _ DATED THIS THE 20TH DAY OF sEPTg:I'v*1'TBfm; PRESENT Q '.'§ " *w THE HONELE MR JU3'i'1'(:£?:.V.Cy.Sfi13iV§'5}iiTj;. THE HOXWBLE MR u:i:sfr1cE" s_.N_.sA1*§'A2§§A;éAY;3:$iA _ I.T.A. ré'Q}1.216/'2o(§5x+{j".: 3 BETWEEN: R 1, THE COMMISSi'OI§E:.R'-OP?'i:NCQ'l'»-El TAX HUBLI. i
2. THE I;I\ICf)§*1{§ 07F§*Ici"E;'F<_;.%.A' HUBL__{.~ ~ « VAPPELLANTS (By--srLA§éVi;i*z;;f)_Ks:'M§;;2~; A::§fyI(3cATE.) AND:' ' "
M/SHQTEL. A3ia:i'1«:_,'§ LAMINGTVON -.Ig<:>.a13«,..% 'HEIBLI. AA _ RESPQNDENT.
(fig Sfi,_S.PAf§T§iASARATHI, ADVCCJATE.) ITA is fiieé under Sectisn 260~--A of the: Income Tax Act; 1961 arising out of order dated 18.6.2004 passed in I'?A.N6.?44/ B)' 2003 for the assessment year 1995-96 "grrsiying to fonznuiate the substantial question of law stateé tlierein and to allow thd appeal and set aside the order " gassed by the Encamé Tax Apmllatc Tribune} as pmjged for. This ZTA coming 01: for hearing this day, SABHAHIT, J., made: the foiiowing:
JUDGl¥!EKT This appeal by the Revenue is filed being aggrifizveci by the order passed by the: Income Tax Appeilate Tribunal, SMC W 'A' vIzAo--<::AMP, Bangalore in 1TA.No.744;VB;;fi;g_/2003 wherein the Appellate Tribunal has held to the karma in his representative »capacity*'an.d'~it onij,*v'ke:t§d--.__ who alone is recognised as a payment made to the partner cannot be disallowed. 11 V 1 1 it V
2. The essesitiaii this appeal one as foliowsz H 1' V 1 it The income on 22.12.95 for the assesstnent income of 1,18,450)' -
Section 143-(1)(a) of the Income 'Fax to as 'the Act') on 24.4.96 and ~ 'iinccme of" 1,533,530] - and later rectified under Section 1 " -. l_1SvA4A-,onA:'$,8_.97 on an income of Rs. 130,790/-. Subsequently, Section 147 of the Act, was initiated by issue of notice 'finder Section 148 of the Act. In response to which the it " assessee filed a letter on 22.4.99 stating that the return it already filed on 22.12.95 may be created as comgliance to notice issued under Section 148 of the Act. The case was taken up for scrutiny by issue of notices under Sections 142(1) and 143(2) on 17.1.2002, 15.2.2002. The assessee did not respond to the said notice. The Income Tax 'Officer, \§;.J\ Ward-1(§), Hnbli, by order dated 18.6.04 disallowed the deductive claimed on account of zemeneration to in their individual capacity on the g1:~<:-und A' said partners were representing the firm. [oft Assessing Oficer in disafiowirggg the iaiveéuefioxi __ in appeal by erder {fie said order passed in appes1;e:.e:tf1e Ashsessiee before the Income Tax. Appejmg 1' 's'MC.i' 'A' VIZAG, CAMP: Bangalore in and the Appellate Tzibunal set aside the order in appeal ovdei' passed by the Assessing Ofieer disdflewéeg' in respect of salaxy paid to the j'.i?;£§ifJiC11i;'V21l..:VflZi'j,?' that salaxy paid to karta in his V'1:esEpect'3've eapéeity and it is the only karts who has partner, Salary paid to him as per the deed Witnin the Section 40(1)) of the Act. Ateeitiingiy, allowed the appea}. Being aggrieved by the said V. aerrder passed by the income Tax Fsppellaite Tribunal, the Revenue has preferred this appeal.
3. We have heard the learned cotmsei appearing for the Revenue and the learziied counsel appearing for the zesponéent. .
4. Having regard to the contentions urged, the substanfial question of law that arises for o11r._§leterir3.r£;ation is this appeal is:
"Whether the finding of the 'rr;.bi;ra1--ae t0--._ the partner representing ea_i~i[}F"isi'al1owab}e perverse' and contraiy to law?" V" V i V and we answer substa31§ial'i"0'{;uesm'ari' of law in the istegative and against file; Reveiiuee..fcii'.rt1ie_'__fol1owing:
e 'jrwA"so_y,§f ii """ for determination and as or mcome TAX AND AN0'i*r1.r:ls.,v.§;'..0EvAI§;xN£> AUTOMOBILES (2008 304 rm 50 it is held that While confuming the ._ors:lvere 'grassed by the Income Tax Apgellate "£'r.i§auna1 in that salary paid to the partner who is regivreseriting another firm, deciuction can be allowed and V " * '_.siriee the said order passed by the Income Tax Tribunal has ii "been confirmed, this court felt that it is unnecessary to answer the substanfial question of law as the same has already been answered by the Income Tax Appellate Tribunal in the previous year aria had become final as the same was not challenged by the iaarties. Similar Vi€"W has also been em) takcn by the High Court of Madras in OF INCOME TAX vs. GOLBEN TOUCH (2o04:18:§:V.:
20?). Accoldingly, we answel' fir pass the following <)n:ler:V I I A 'I V' "
The appeal is Iudéé ' Sd/'5 7'1d9"é' ksv**