The case ITA No.956/Del/2020 concerns an appeal filed by Ram Narayan Contractor against the decision of the Income Tax Officer of Circle-62(1), New Delhi. This appeal pertains to the assessment year 2014-15 and involves a dispute over the denial of claims for interest on capital and salary to a partner.
Ram Narayan Contractor, represented by KVSR Krishna, Advocate, filed an appeal against the order of the CIT(Appeals)-20, dated February 13, 2020. The primary issues in dispute were the non-allowance of interest on capital amounting to Rs.29,68,351 and a salary to partner of Rs.59,94,429. The Assessing Officer rejected these claims, leading to the appeal.
The appellant challenged the assessment made under sections 143(3) read with 144 of the Income Tax Act, 1961. Initially, the assessment resulted in an addition based on an estimated profit rate of 8% of gross turnover, which was later adjusted to 5% by the CIT(A). Further appeals concerning the rejections of interest on capital and salary to partners were dismissed under section 154, with reference to the conditions specified in sections 184 and 185 of the Act.
The ITAT, consisting of Dr. B.R.R. Kumar, Accountant Member, and Shri Yogesh Kumar U.S., Judicial Member, noted that the primary issue was the procedural fairness of the assessments and appeals. The Tribunal highlighted the need for a thorough re-examination of the claims and the documentary evidence supporting them. Consequently, the matter was remanded back to the CIT(A) for a de-novo adjudication to ensure that the assessee’s arguments are fully considered.
The appeal by Ram Narayan Contractor was partly allowed for statistical purposes, and the case was sent back for further review by the CIT(A). This decision underscores the importance of procedural correctness and comprehensive review in tax assessments and appeals.
Income Tax Appeal Review: Ram Narayan Contractor vs. ACIT Circle-62(1), New Delhi, AY 2014-15
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