Ita/78/2013 Of P.m.paul v. The Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE WEDNESDAY, THE 4TH DAY OF DECEMBER 2013/13TH AGRAHAYANA, 1935 ITA.No. 78 of 2013 () ---------------------- (AGAINST THE ORDER IN ITA.NO. 213/COCH/2006 OF INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH DATED 31-01-2012) ------------------------------------- APPELLANT: ------------------------- P.M. PAUL, GLEN TEA FACTORY, GLEN MARY.P.O, PEERUMEDU. BY ADVS.SRI.P.BALAKRISHNAN SRI.MOHAN PULIKKAL SRI.K.S.MENON RESPONDENT : ------------------------------- THE COMMISSIONER OF INCOME TAX, KOTTAYAM. BY SRI.JOSE JOSEPH, SC, INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 04-12-2013,ALONG WITH ITA.NO.118/2013 AND ITA.NO.154/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts ITA.NO.78/2013 APPENDIX PETITIONER'S ANNEXURES: ANNEX ACOPY OF THE ASSESSMENT ORDER DATED 17/11/2005 ANNEX BCOPY OF THE ORDER DATED 31/01/2006 OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOCHI, IN ITA.NO.25/K/CIT-IV/05-06INCOME TAX (APPEALS), KOCHI, IN ITA.NO.25/K/CIT-IV/05-06 ANNEX CCOPY OF THE ORDER DATED 06/10/2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH IN ITA.NO.213/COCH/2006APPELLATE TRIBUNAL, COCHIN BENCH IN ITA.NO.213/COCH/2006 ANNEX DCOPY OF THE JUDGMENT IN ITA.NO.775/COCH/2009 DATED 10/2/2010 OF THE HON'BLE HIGH COURT OF KERALAOF THE HON'BLE HIGH COURT OF KERALA ANNEX ECOPY OF THE ORDER DATED 31/01/2012 OF THE INCOME TAX APPELLATE TRIBUNAL 213/COCH/2006APPELLATE TRIBUNAL 213/COCH/2006 ANNEX 1COPY OF THE MEDICAL CERTIFICATE DATED 05/01/2013 ISSUED BY DR.PAVITHRANDR.PAVITHRAN RESPONDENT'S ANNEXURES:NIL /TRUE COPY/ P.A.TO.JUDGE Manjula Chellur, C.J. & A.M. Shaffique, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A. Nos. 78, 118 and 154 OF 2013 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 4[th] day of December, 2013 Manjula Chellur, C.J. JUDGMENT These three appeals arise from a common order by the appellate authority for the assessment years 1998-99,1999-2000 and 2000-01. 2. It is not in dispute that the appellant is a partner in six partnership firms. The returns filed for the aboveassessment years were processed under Section 143(1)(a) ofthe Income Tax Act accepting the income returned andsubsequently the assessment came to be reopened and noticeunder Section 148 came to be issued on the ground thatinterest paid by the assessee to the firms from which he hadborrowed money were set off from the salary received by himfrom the firms and thereafter only net amount was shown asincome from the firms resulting in escapement of income fromassessment. 3. The claim of the assessee was rejected by theassessing officer as well as the first appellate authority and the ITA No. 78,118 & 154 of 2013 -:2:- 2. It is not in dispute that the appellant is a partner in six partnership firms. The returns filed for the aboveassessment years were processed under Section 143(1)(a) ofthe Income Tax Act accepting the income returned andsubsequently the assessment came to be reopened and noticeunder Section 148 came to be issued on the ground thatinterest paid by the assessee to the firms from which he hadborrowed money were set off from the salary received by himfrom the firms and thereafter only net amount was shown asincome from the firms resulting in escapement of income fromassessment. 3. The claim of the assessee was rejected by theassessing officer as well as the first appellate authority and the ITA No. 78,118 & 154 of 2013 -:2:- Tribunal. So far as the impugned order the Tribunal hasdiscussed in detail at paragraph 4 of the order wherein thematerial facts placed before the authorities were analysed.According to the revenue, in the absence of any nexus betweenthe salary income received from the firms, even thoughassessable as business income, and the interest paymentsthereto, there cannot be such a benefit so far as the interest paidby the appellant assessee is to be given to him as claimed byhim. It was further held that he receives remuneration as aworking partner and according to the Tribunal, this ought to besupported by information as to the capital borrowed from eachfirm and the salary earned therefrom and so far as how it has tobe set off so far as interest payable by him. In the absence ofany such material forthcoming, the authorities were justified inrejecting the claim of the appellant assessee that the interestpayable by him on the amounts borrowed by him was set offagainst the salaries to be paid to him as a partner of the firms. We find no ground so far as the substantial questionsof law to be considered in the above appeals as all the appeals ITA No. 78,118 & 154 of 2013 -:3:- were disposed of only based on the facts available on record.Accordingly, the appeals are dismissed. Manjula Chellur, Chief Justice. A.M. Shaffique, Judge. ttb/04/12