Case Law Details
DCIT Vs Ms. India Housing (ITAT Kolkata)
We note that as per clause 10 of the Partnership Deed, no interest was to be charged or paid to the partners in respect of balances standing to the debit or credit of their capital account. As per Partnership Act, 1952, the partners can carry on any business jointly and can also act upon in the manner as they deem fit in the inter se relationship between them. We note that the debit balance in one of the partner’s current account i.e, Carlton Hotel (P) Ltd, is appearing for last several years and the case of the assessee has been under scrutiny and in none of the earlier years any such hypothetical income has been subjected to tax in the hands of the assessee and therefore, following the principle of consistency, there being no change in the facts and circumstances during the year under consideration, there is no justification of the AO in imputing interest income on the debit balance of the said partner and subjecting the same to tax in the hands of the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned two appeals filed by the Revenue pertaining to assessment year 2011-12 and 2012-13 are directed against the separate orders passed by the commissioner of Income Tax (Appeals), in appeal No.69/CIT(A)- XIX/Addl.Cir,R-33/Kol/14-15 and appeal No. 559/CIT(A)-9/Cir-33/2014-15/Kol, dated 05.11.2014 and 31.12.2015 respectively. The Cross Objection filed by the assessee pertaining to assessment year 2011-12 is directed against the order passed by the commissioner of Income Tax (Appeals), in appeal No.69/CIT(A)- XIX/Addl.Cir,R-33/Kol/14-15, dated 05.11.2014.
2. Since these two appeals filed by the Revenue and cross objection filed by the assessee pertain to same assessee, identical issues are involved, therefore, these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. For the sake of convenience, the grounds as well as the facts narrated in ITA No. 125/Kol/2015, for assessment Year 2011- 12, have been taken into consideration for deciding the above appeals en masse.
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