TaxTMI 
TaxTMI 
2013 (6) TMI 821
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....ts. Therefore, for the sake of convenience, all these appeals are decided by this common order. 3. The first common ground is that CIT(A) has erred in law and on facts in sustaining the assessment order passed by the A.O. under section 153A of the Income Tax Act, 1961 ('the Act' hereinafter) read with section 143(3) of the Act in the absence of proper search warrant against the assessee. 4. The ld. Authorised Representative withdrawn this ground of the appeal for all the three Assessment Years. Therefore, the same is dismissed as withdrawn for all the three Assessment Years under appeal. 5. Second effective common ground raised in these appeals pertains to disallowance of salary/remuneration to partners and car expenses. 6. The ....
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....d 23.11.2012 . The relevant facts and finding of I.T.A.T. are reproduced as under :- "4. Brief facts of the first ground are that the assessee is a partnership firm engaged in the business of contractor-ship. During the assessment proceedings, the A.O. noticed that in the partnership deed dated 01.04.2001 the assessee firm had neither specified the amount of remuneration payable to each working partner nor lays down the manner of qualification of such remuneration. The A.O. disallowed the remuneration to partner invoking provision of section 40(b)(v) of the Income Tax Act, 1961 ('the Act' hereinafter). The A.O. relied upon the C.B.D.T. Circular No.739 dated 25.03.1996. The disallowance made by the A.O. has been confirmed by the CIT....
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....puted that the partners were paid remuneration which was less than the maximum provided by the IT Act. None of the authorities have doubted the payment of remuneration and in fact account books of the assessee firm have been accepted to be correct. Therefore, nobody has doubted the payment of remuneration to the partners. The circular has to be read along with s.40(b)(v) and has to be made subject to s.40(b)(v). This section does not lay down any condition of fixing the remuneration or the method of remuneration in the partnership deed. All that the section provides is that in case the payment of remuneration made to any working partner is in accordance with the terms of the partnership deed and does not exceed the aggregate amount....
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....- for the A.Y. 2002-03 are deleted. 10. The second part of the addition is on account of 1/6th disallowance out of car expenses on account of personal use. The disallowance made has been confirmed by the CIT(A). 11. We have heard the ld. Representatives of the parties and records perused. The A.O. disallowed car expenses on account of personal use. The personal use of car by partners cannot be ruled out. In the light of the fact, to that extent the car expenses incurred cannot be said to be incurred wholly and exclusively for the purpose of business. Once it is found that the expenditure has been incurred wholly and exclusively for the purpose of business, the same cannot be allowed under section 37 of the Act. The assessee has failed....