TaxTMI 
TaxTMI 
2019 (12) TMI 200
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....issue is involved in both the appeals. Hence, for the sake of convenience for adjudication, we take up the appeal in ITA No.445/Ctk/2017 for assessment year 2012-13 as a lead case, wherein, Grounds of appeal raised are as under: "1. For that the learned Commissioner of Income Tax (Appeals) is wholly unjustified to hold that commission paid to HUF of two partners for services render is not allowable in the hands of the firm, is illegal, arbitrary and bad in law and commission so paid should be allowed in the facts and circumstances of the case. 2. For that commission of Rs. 3 lakh each paid to HUFs of two partners Sri Bikram Agarwal and Vinay Agarwal for services rendered is an allowable business expenditure and should be f....
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....in the appellant partnership firm in the form of unsecured loan which gets support from the copies of the balance sheet for financial year 2011-12 pertaining to assessment year 2012-13 filed by the assessee firm as well as both HUF entities. Ld A.R. submitted that the balance sheet of both HUFs as well as present assessee partnership firm clearly reveal that there was investment of HUF funds in the present partnership assessee firm. Therefore, the commission paid by the assessee should be allowed as business expenditure. Ld A.R. also submitted that even during financial year 2012-13 pertinent to assessment year 2013-14, the unsecured loan is further enhanced. Therefore, the commission paid to both HUFs should be allowed. 4. Ld AR also su....
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....s observed thus: " The judgment of the Andhra Pradesh High Court aforementioned was cited before the High Court at Madras in the reference proceedings out of which these appeals arise but the Madras High Court dissented therefrom. It dilated at length on Hindu Law but, with great respect, missed the point that the Tribunal is the final fact-finding authority and, as it has itself noticed in the judgment under challenge, the Tribunal had held that the remuneration and commission received by the Karta of the HUF were earned by him on account of his personal qualifications and exertions and not on account of the investment of the family funds in the company and, therefore, could not be treated as the income of the HUF. The Hi....
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....ersy was placed for adjudication before the Hon'ble Supreme Court in the case of K.S.Subbiah Pillai (supra), where in para 2 (supra) speaking for the Hon'ble Apex Court, Their Lordships of three Judges Bench held that if the remuneration is paid because of investment of family funds in the business then it was the income of the HUF and it was a compensation made for services rendered by the individual co-parcener of the HUF then same is to be treated as income of the individual co-parcener. 8. In our humble understanding, the remuneration is a wide term which includes commission also. As we have already noted above that from the balance sheet of both recipients and the assessee partnership firm, it reveals that Bikram Agarwal, HUF provid....