2003 (2) TMI 425

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.... Per Shri N.S. Saini, Accountant Member. - The Revenue has filed this appeal against the order of the learned CIT(Appeals) passed in the assessment year 1997-98 dated 12-3-1999. 2. The grievance of the Revenue is that the learned CIT(A) was not justified in deleting the addition of Rs. 5,25,863 as remuneration paid to the working partners which was not in conformity with Circular No. 739 dat....

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....essment year 1997-98 onward under the said category - type 'a'. Since, both the grounds of appeal relate to the allowance of remuneration paid to the partners in terms of the Partnership Deed, they are disposed of together for the sake of convenience. 4. In the course of making adjustment under section 143(1)(a) the Assessing Officer observed that remuneration paid to the partners under section....

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....f quantifying such remuneration." The learned Authorised Representative of the assessee submitted that the assessee in its Partnership Deed has clearly mentioned the manner in which the remuneration to the working partners was to be distributed which was in accordance with the circular as well as to the provisions of section 40(b)(v ) of the Act. The learned CIT(A) after considering the formula....

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....mula : (a) On the 1st Rs. 75000.00 of the book profit : Rs. 50000.00 or @ 90% of the book profit, whichever is more. (b) On the next Rs. 75000.00 of the book profit : 60% (c) On the balance of the book profit : 40% The total salary to working partners calculated as above shall be equally divided among the two working partners mentioned in clause No. 9. In ....