TaxTMI 
TaxTMI 
2008 (12) TMI 275
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....hence, we shall take up the facts from that year to decide these two appeals, and the grounds raised are reproduced below: "1. Whether, on the facts and in the circumstances of the case and in law. the learned CIT(A) was justified in allowing salary to partners on the basis of photo-copy of a partnership deed, not submitted along with return of income, though the assessee had not complied with the requirements laid down in s. 148 r/w s. 139 of the IT Act, 1961, and hence invited the rigours of sub-s. (5) of s. 184 of the IT Act, 1961? 2. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) was justified in allowing salary to partner, on the basis of photo-copy of a partnership deed not submitted along ....
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.... March, 1996 [(1996) 131 CTR (St) 53] the AO has said that the provisions of payment of salary have been made clear and since there was no specified quantification therefore. assessee was not entitled for claim of deduction under s. 40(b) of IT Act regarding salary to partners. In response, the assessee has furnished copies of the partnership deed executed from time to time dt. 5th April, 1999, 1st April, 2001 and 16th June, 2003. After perusing those partnership deeds the observation of the AO was that partnership deeds executed on 5th April, 1999 and 16th June, 2003, the relevant pages were without signatures of the partners. He expressed possibility that those pages might have been replaced later on. He has also noticed that in the partn....
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....nership deed dt. 5th April, 1999 was filed along with the return of income itself for the asst. yr. 1999-2000. As already discussed above that during the course of the assessment proceedings itself the appellant filed the partnership deed dt. 5th April, 1999 which is more or less the same as filed along with the return. The assessee has also filed certified copy of the partnership deed from the PWD, Hingoli, evidencing the fact that this partnership deed was in existence during the previous year relevant to the assessment year in question. Therefore, looking into the totality of the circumstances, it can be said that the partnership deed dt. 5th April, 1999 is genuine partnership deed and on the basis of the partnership deed, the assessee i....
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....hed. In respect of the legal issue he has placed reliance on the CBDT circular cited supra to stress upon the necessity of quantification of salary in the clauses of the partnership deed. 4. From the sides of the respondent assessee learned Authorised Representative, Shri J.S. Singh appeared and supported the order of learned CIT(A). 5. Heard the submissions of both the sides at length and also carefully perused the orders of the authorities below in the light of the compilation file1d. We have found that by Finance Act, 1992 w.e.f. 1st April, 1993 an insertion was made in s. 40 of IT Act vide cl. (b) which prescribes that in the case of a firm assessable as such any payment of remuneration to any partners who is a working partner, if not....
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....term "authorize" and not used the term "quantify". On the other hand, the AO has made the disallowance mainly because of the reason that the amount of salary was not quantified in the clause of the partnership deed and in support he has relied upon CBDT Circular No. 739. dt. 25th March, 1996 [(1996) 131 CTR (St) 53]. In this regard, we may like to clarify that CBDT cannot issue a circular under s. 119 which would tentamount to write or detract from the provisions of IT Act. CBDT is empowered to issue only administrative instructions to subordinate offices only for the purpose of correct enforcement of the provisions of the statute as it was held in the case of Jalgaon District Central Co-operative Bank Ltd. vs. Union of India (2003) 184 CTR....
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.... permissible to add words into a taxing provisions which are not there or exclude words which are there. So, the words contained in a provision must be given a natural meaning as commonly understood in legal parlance. For this proposition, we place reliance on CED vs. R. Kanakasabai & Ors. 1973 CTR (SC) 227 : (1973) 89 ITR 251 (SC). 5.2 Next is the question that what will be impact of alleged change of p. 5 in the partnership deed as pointed out by learned Departmental Representative. This serious allegation was strongly refuted by learned Authorised Representative by placing on record a certified copy of said partnership deed which was stated to be filed before PWD who has certified the said deed dt. 5th April, 1999. The contention was th....