2012 (11) TMI 1213

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ri K.K. Mishra, Jr. D.R. ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order dated 29.04.2011 passed by the ld. CIT(A), Gwalior for the Assessment Year 2007-08. 2. The assessee has raised the following grounds of appeal :- "1. On the facts & in the circumstances of the case, the learned CIT(Appeal) was not justified in confirming....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 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 ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....part of the main statute. A delegate of person authorized to issue delegated legislation cannot virtually set at naught the provisions of the main statute. A reading of s.40(b)(v) clearly shows that amount of remuneration which does not exceed the amount given in the IT Act is deductable. The CBDT in Circular No.739, dt. 25th March, 1996 has provided that either the amount of remuneration payable ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ular 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 aggrega....