High Court Of Kerala
Smt. Leelamma John Thoppil & Anr. vs. Assistant Commissioner Of Income Tax & Ors.
Section 28(v)
Asst. Year 1993-94
C.N. Ramachandran Nair, J.
OP No. 20525 of 2001
20th March, 2006
Counsel Appeared :
P. Balachandran, for the Petitioners : George K. George, for the Respondents
JUDGMENT
C.N. Ramachandran Nair, J. :
Petitioners are challenging Exts. P9 and P10 whereunder the CIT has rejected the revision petition filed by both the petitioners filed under s. 264 of the IT Act against income-tax assessment for 1993-94.
Petitioners are partners of a firm by name M/s Thoppil Finance. Income returned by the petitioners for the asst. yr.1993-94 was towards remuneration and salary received from the said firm. Assessments were completed accepting the returns of the petitioners vide order dt. 28th Feb., 1996. However, there was dispute in the firm’s assessment which was settled vide Ext. P3 order dt. 25th Sept., 1997. The claim of the petitioners is that while issuing order by the Settlement Commission for the three years 1990-91 to 1993-94, the Settlement Commission took the figures from P&L a/c and added to thereon salary and remuneration paid to partners and thereafter made certain additions on estimation basis. Therefore, the case of the petitioners is that when remuneration and salary paid to the petitioners was disallowed in the hands of the firm, the same cannot be assessed in the hands of the partners as individual income. In short, petitioners grievance is against double assessment of same income. Senior standing counsel appearing for Revenue contended that the CIT has no authority to interfere with the decision of the Settlement Commission and petitioners’ assessments were made based on returns filed. Moreover, he justified the finding of the CIT that there is no express disallowance of salary or remuneration paid to the partners by the Settlement Commission in their order. It is seen from the sequence of events that settlement of firm’s liability by the Settlement Commission was subsequent to completion of assessments of the partners. Therefore, Settlement Commission which has settled the assessment of the firm for the very same asst. yr. 1993-94 would have taken note of individual assessments in the name of the partners namely petitioners representing remuneration and salary. It was for the firm to have brought this to the notice of the Settlement Commission. The individual assessments of the partners on income received in the form of remuneration and salary from the very same firm and whatever relief that was eligible should have been considered in the assessment of the firm in settlement. Therefore, the CIT rightly assumed that the Settlement Commission has not made any specific disallowance under s. 40(b) of the IT Act and so much so he rightly declined to interfere with the assessment orders of the two petitioners which were completely based on returns filed.
In the circumstances, I do not find any ground to interfere with the impugned revisional orders issued by the CIT. The OP is therefore devoid of any merit and is dismissed. No costs.
[Citation : 295 ITR 368]