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The Commissioner Of Income Tax vs M/S S B Pannalkar & Co on 2 November, 2010

In this view of the matter, the action of the learned CIT(Appeals) in placing reliance on and following the aforesaid decision in the case of M/s. S.B. Pannalkar & Co. (supra) is in order and we have no hesitation in upholding the decision of the learned CIT(Appeals) on this issue. We, therefore, dismiss ground No.4 raised by revenue. 5.3.3 It is not in dispute that the assessee has been assessed in the status of a firm for several years. Therefore, in accordance with the provisions of section 184 of the Act, the assessee shall be assessed in the same capacity, unless there is a change in the constitution of the firm. The Assessing Officer in the order of assessment has observed that there has been a change in the partnership deed of the firm in the period under 7 ITA No. 1051/Bang/12 consideration. This observation of the Assessing Officer was disputed by the assessee before us. It was submitted by the learned Authorised Representative that there was neither a change in the constitution of the firm nor in the shares of the partners and therefore the assessee is liable to be assessed as a firm only in the period under consideration. It was also submitted by the learned Authorised Representative that there has been no defaults as mentioned in section 144 of the Act for the Assessing Officer to invoke the provisions of section 184(5) of the Act. In the above factual view of the matter, we are of the considered opinion that there is no basis for the Assessing Officer to invoke the provisions of section 184 of the Act to disallow the remuneration and interest paid to the partners by the assessee firm.
Karnataka High Court Cites 9 - Cited by 2 - Full Document
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