JUDGEMENT
S.K. Chander, Accountant Member -
(1.)THESE appeals by the revenue are directed against the orders of the AAC for the assessment years 1978-79, 1979-80, 1981-82 and 1982-83 all dated 19-12-1985. For each year, a solitary ground taken up by the revenue projects the following grievance :
On the facts and in the circumstances of the case, the AAC was not justified in deleting the addition rightly made by the ITO on account of salary and interest paid to the partners of the firm treated as URF.
THESE appeals were fixed for hearing after due notice to the parties. We find that the AD card is on record. However, when these appeals were called on for hearing, there was no representation either through the authorised representative or in person by any of the partners of the firm. The appeals, therefore, have been heard ex parte on merits, qua, the respondent and are being disposed of in accordance with law.
(2.)We find that for the assessment year 1978-79 the original return was filed on 31-3-1979 and an ex parte assessment was made u/s 144 on 31-3-1981. However, that assessment was cancelled by invoking provisions of Section 146 of the Act. Another assessment was made u/s 144 on 30-12-1981 and that assessment was set aside by the Commissioner under Section 264 of the Act. Thereafter, the impugned assessment was made on 26-12-1984. We find in this order the ITO adopted the status of the assessee as URF on the ground that no evidence had been furnished for filing Form No. 11/12. However, for the assessment year 1979-80, Form No. 11A was filed on 15-6-1979 but it was not accompanied by copy of the instrument evidencing the partnership and in spite of the opportunity given neither the original partnership deed nor copy thereof was furnished to the ITO. He, therefore, made an order under Section 185(1) refusing to grant registration to the firm. Accordingly, the status was taken as URF for this year as well.
For the assessment "years 1981-82 and 1982-83 in the impugned orders made under Section 143(3) respectively on 12-3-1984 and 26-12-1984, the ITO has mentioned that he asked the assessee to furnish, inter alia, evidence for having filed Form No. 11, 11A or 12 for these years. Since that was not produced and according to him, Form No. 11 or 12 had not been filed, the status of the assessee was taken as URF.
(3.)BY adopting the status of the assessee as URF for each of the asst. years under appeal mentioned supra, the ITO completed the assessments. For all the asst. years, we find that, as per profit & loss account, there was loss declared. In computing the total income for the first two assessment years under appeal, the ITO reduced the loss by disallowing the salary and interest paid to partners which amounted to Rs. 3,884 & Rs. 31,562 and Rs. 35,761 & Rs. 30,742 respectively for the asst. years 1978-79 and 1979-80. The position regarding the assessment year 1981-82 is not clear though the salary and interest were disallowed similarly. For the asst. year 1982-83 interest paid to partner and disallowed amounted to Rs. 19,412. These assessments were challenged in appeal before the AAC.
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