TaxTMI 
TaxTMI 
2009 (3) TMI 519
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....anding counsel appearing for the appellant and counsel appearing for the respondent assessee. 2. The assessee is a partnership firm consisting of nine partners of which five are ladies. In the course of assessment the Assessing Officer noticed that the assessee has paid salary to other partners treating each and every partner as a working partner. On enquiry the Assessing Officer found that four partners are residing in far away places from place of business of the firm. The firm was engaged in mining of clay at a place near Trivandrum. However, these four partners are regularly residing in Alleppey where the firm does not have any branch of its or business operations. The Assessing Officer found that at least these four partners are not w....
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....inutes recorded work have been assigned to partners. Similarly the partnership deed provides that every partner will take part in the business. We do not think these are the tests to find out whether a person is engaged as a working partner in the business of the firm. A partner can take part in business only at the place of business or where the partnership has business transactions. The assessee has no case that it has any business operations or dealings in the place where all these four lady partners are residing at Alleppey which is 150 kms away from the place of business. No evidence whatsoever is produced to establish the nature of operation or control or administrative or other work done by these ladies for the firm. We do not find a....
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..... We are of the view that this finding is not sufficient to reverse the finding of the Assessing Officer because he himself allowed 75 per cent. of the expenditure and only 25 per cent. was found to be inflated for the purpose of helping the related persons. We do not find any material or justification for the first appellate authority or the Tribunal to allow the claim. At the maximum they could have remanded the case to the Assessing Officer to examine each and every bill and voucher pertaining to the payments made to partners and relatives to compare with market rates and to disallow the excess over actual payments. We do not think at this distance of time we should remand the case for more than one reason. In the first place, if we rema....