TaxTMI 
TaxTMI 
2016 (9) TMI 1065
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....,000/- which is requested to be deleted. 3. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") was framed vide order dated 11.12.2009. While framing the assessment, the Assessing Officer made addition on account of shortage in stock, disallowance of remuneration paid to working partner and disallowance of gift expenditure and also initiated penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. Subsequently, the Assessing Officer levied penalty of Rs. 3,00,000/- on addition of Rs. 8,89,592/- vide order dated 28.01.2011. Against this penalty order, the assessee fil....
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....ed as unaccounted sales and disallowance of remuneration to partner paid to the private limited company. We find that ld. CIT(A) has decided this issue by observing as under:- "2.3 I have carefully considered the submissions of the Ld. Counsel and the facts of the case. The penalty u/s 271(1)(c) of the Act has been levied for furnishing of inaccurate particulars of income with reference to remuneration paid to the company M/s. Dhiraj Diamond Tools Pvt Ltd as working partner and for the shortage of stock treated as unaccounted sales. It is the settled position of law that the remuneration etc. can be paid by the firm only to the individuals and not to the representative of the partner. The Hon'ble Supreme Court in the case of Rashik Lal & ....
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....ation by the company but the company had claimed the deduction by showing the remuneration as other income. Thus, the basic purpose of giving remuneration to the company was to oblige the company to claim certain expenses against this income. The Assessing Officer had thus rightly come to a conclusion that the details supplied by the assessee in the return of income with reference to the remuneration to partners was incorrect and the decision of Hon'ble Supreme Court in the case of Reliance Petro Products Pvt Ltd 322 ITR 158 (SC) is not applicable on the facts of the case. The Assessing Officer was thus justified in levying the penalty for furnishing inaccurate particulars of income with reference to the payment of remuneration to the compa....