TaxTMI 
TaxTMI 
2016 (6) TMI 372
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.... issue is fully covered by the decision of Merillin Shipping 70 DTR 81 (2012) but the ld CIT(A) interpreted differently. 2. That the ld A.O. as well as ld CIT(A) grossly erred in disallowing the printing expenses Rs. 79,000/- by taking recourse of Sec. 40(a)(ia). This is also covered by the decision of Merillin Shipping 70 DTR 81. 3. That the ld A.O. as well as Ld. CIT(A) grossly erred in disallowing the electricity expenses Rs. 5566/-. 4. That the ld A.O. as well as Ld. CIT(A) grossly erred in not allowing the remuneration paid to partners U/s 40(b) Rs. 26,40,000/-. The remuneration have been paid." 2. The assessee filed its return of income on 29/09/2009 declaring total income of 60,80,880/-. The assessee is ....
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....s. The ld AR of the assessee has submitted that the assessee had paid AMC charges during the year under consideration as per agreement and payment is below specified limit prescribed U/s 194C of the Act. He further argued that the ld CIT(A) has not appreciated the fact of decision in the case of Merilyn Shipping (2012) 70 DTR 81. Later on the Hon'ble Allahabad High Court in the case of CIT Vs. M/s Vector Shipping Services Pvt. Ltd. 357 ITR 642 has applied the Special Bench decision and held that if the amount already paid, no TDS is required to be made by the payer. The SLP in this case also dismissed by the Hon'ble Supreme Court. Therefore, the additions confirmed by the ld CIT(A) are not justifiable and may be dismissed. 4. At the ....
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.... been come before us. The assessee has not been able to establish that these expenses were incurred wholly or exclusively for the business purposes, therefore, we uphold the order of the ld CIT(A) on this ground. 7. Ground No. 4 of the assessee's appeal is against not allowing the remuneration paid to the partner U/s 40(b) of the Act at Rs. 26,40,000/-. The ld Assessing Officer observed that the assessee had debited remuneration to the partners at Rs. 26,40,000/-. The ld Assessing Officer gave reasonable opportunity of being heard on the ground that the firm has not specified remuneration to the partner as per copy of partnership deed filed alongwith the reply. The assessee stated that the assessee furnished copy of partnership deed alon....
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.... Rs. 26,40,000/-. It is further submitted that firm as well as partners are in the same bracket of tax, there is no revenue loss in the hands of the partners or in the hands of the firm. Thus, there was no intention to evade the tax by the firm. The assessee had filed partnership deed and its clarification but the ld CIT(A) had not accepted the clarification which can be given any time but the basic thing is that in case of payment of remuneration the clause was given in the deed and assessee claimed this deduction on the basis of various decisions on this issue. He relied on the decision of Hon'ble Himachal Pradesh High Court in the case of Durga Dass Devki Nandan Vs. ITO (2011) 241 CTR 180 (HP) wherein it has been held that CBDT cannot....
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....licable provision as may be in force in the income tax assessment of the partnership firm of the relevant accounting year. 14. The partners shall be entitled to revise the mode of calculating the above remuneration as may be agreed upon by and between them from time to time. Such remuneration shall be calculated at the close of the accounting year and partners shall be entitled to draw out the remuneration for their personal needs from time to time." Thereafter the assessee filed revised partnership deed before the Assessing Officer and ld CIT(A) and clause -12 has been modified as under:- "The above said clause is un-completed to over sight, hence it is to be read as under: Clause No. 12: The partners shall be....
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....basis of partnership when CIT have coterminous power with A.O. and the assessee has submitted modified partnership before him and Hon'ble Himachal Pradesh High Court decision on this issue in the case of Durga Dass Devki Nandan Vs. ITO (supra) was relied upon by the AR of the assessee, which is squarely applicable on the facts of the case. He was not justified to confirm the addition on account of remuneration of partner. This circular has also been considered by the Hon'ble Jurisdictional High Court in the case of CIT Vs. Paras Cotton Company (2007) 288 ITR 211 (Raj) wherein the CIT found allowability of the remuneration to the partners in the scrutiny assessment, erroneous and prejudicial to the interest of revenue and on supplementary de....