TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal rules on partner & employee payments, upholds addition for sundry creditors.</h1> <h3>A.F. Ferguson & Co. Versus The Asstt. Commissioner of Income tax, Range-11 (2), Mumbai.</h3> A.F. Ferguson & Co. Versus The Asstt. Commissioner of Income tax, Range-11 (2), Mumbai. - TMI Issues involved:The judgment involves disputes on three different grounds: (1) Addition on account of sundry creditors, (2) Additions on account of payment to retired partners and wives of deceased partners under the provisions of partnership deed as diversion of income, and (3) Disallowance of payment made to a retired employee.Issue 1: Addition on account of sundry creditorsThe AO noted discrepancies in the balance sheet of the assessee regarding sundry creditors, which led to an addition of Rs. 2,68,564. The CIT(A) confirmed this addition, stating that the assessee was following the cash method of accounting, making the sundry creditors unjustified. The Tribunal upheld the CIT(A)'s decision based on similar disputes in previous assessment years.Issue 2: Additions on account of payment to retired partners and wives of deceased partnersThe dispute centered around deductions claimed by the assessee for payments made to retired partners and spouses of deceased partners under the partnership deed. The AO disallowed the claim, considering it as a diversion of income. However, the Tribunal, after examining the partnership deed, allowed the claim, stating that it was a case of diversion of income and not application of income, as argued by the authorities.Issue 3: Disallowance of payment made to a retired employeeThe AO disallowed a payment of Rs. 5.00 lacs made to a retired employee as pension, citing lack of evidence of partner agreement. The CIT(A) upheld the disallowance, but the Tribunal overturned this decision, stating that the claim should not be disallowed solely on the ground of lack of partner agreement, as no amount can be paid to an employee or ex-partner without partner consent.In conclusion, the Tribunal partly allowed the appeal of the assessee, overturning the decisions on the second and third disputes while upholding the addition on account of sundry creditors.
TaxTMI 
TaxTMI 
