2015 (3) TMI 1395 - AT - Income Tax

Tribunal affirms disallowance of payment to deceased partner's spouse despite partnership deed argument.

The Tribunal upheld the decision of the CIT(A) disallowing a payment made by the firm to the deceased partner's spouse, despite the appellant's arguments ... Disallowance of payment made by the firm to the spouse of the deceased partner - CIT(A) erred in confirming the action of the Assessing Officer in not allowing the claim of the appellant - HELD THAT:- As decided in own case [2012 (12) TMI 86 - ITAT MUMBAI] as held it is clearly a gratuitous payment made by the assessee firm which was not an allowable business expenditure u/s 37(1) –Decided in favor of revenue Issues: Disallowance of payment made by the firm to the spouse of the deceased partner.Analysis:1. The appeal was filed by the assessee against the order of CIT(A) 3, Mumbai, regarding the disallowance of a payment made by the firm to the deceased partner's spouse. The appellant contended that the payment should be allowed as per the partnership deed.2. The assessee firm had paid an amount to the deceased partner's spouse and claimed it as a revenue expenditure under section 37. The justification provided was that the payment was made in accordance with the partnership deed, specifically clause 12.4. The appellant relied on a previous court decision to support their claim.3. During the proceedings, the appellant's authorized representative admitted that a similar issue was raised in the previous year and the ITAT had upheld the disallowance made by the revenue authorities in that case.4. The decision was based on the arguments presented by both parties. The Departmental Representative (DR) relied on the orders of the revenue authorities. The Tribunal found no justification to overturn the CIT(A)'s decision, which was deemed comprehensive and well-reasoned. Additionally, the Tribunal noted that a similar decision had been made against the assessee in the previous year by the ITAT.5. Consequently, the Tribunal upheld the decision of the CIT(A) and dismissed the appeal filed by the assessee. The appeal was concluded with the pronouncement of the order in an open court on 04/03/2015.