Case Law Details
Eastern Engineering Venture Vs ITO (ITAT Cuttack)
There is no dispute that the assessment was done under section 144 as the assessee had not complied to the hearing notices served upon the assessee. Later on the Assessing Officer had reason to believe that income had escaped assessment. Therefore, he issued notice u/s.148 of the Act and also issued notices u/s.142(1). There were some partial compliances and in some cases, no compliance was made. Hence, he framed assessment u/s.147/144 of the Act.
CIT(A) was of the view that u/s.184(5) of the Act, the assessee is not entitled for deduction by way of any payment of interest, salary, bonus, commission or remuneration by whatever name called made by the firm to the partner, if the assessment order is passed as a result of failure of the assessee as mentioned in section 144 of the Act.
ITAT held that As there was part non-compliance by assessee with first notice under section 142(1) and complete non-compliance with subsequent notice under section 142(1), the AO was right in framing assessment order under section 144 and in denying allowance of interest and salary paid to partners by taking support of provisions of section 184(5).
FULL TEXT OF THE ITAT JUDGEMENT
Please become a Premium member. If you are already a Premium member, login here to access the full content.
