TaxTMI 
TaxTMI 
2019 (12) TMI 356
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....d to as "the Act") dated 31/03/2016 relevant to Assessment Year (AY) 2013-14. The assessee has raised the following grounds of appeal: The appellant objects to the order dated 16 March 2018 ('impugned order') passed by the Principal Commissioner of Income-Tax-4 ('learned CIT) under section 263 of the Income Tax Act, 1961 ('the Act) for the above mentioned assessment year, on the following among other grounds: 1. The impugned order passed by the learned CIT under section 263 of the Act is bad in law and contrary to the provisions of the Act and hence ought to be quashed. 2. The learned CIT grossly erred in setting aside the Assessment Order dated 31 March 2016 passed by the Assessing Officer ('AO') under sectio....
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.... Act and was duly supported by judicial precedents and hence, the provisions of section 263 of the Act have no applicability. 4. Payment to Retired Partners 4.1 The learned CIT erred in law as well as on facts in stating that the payment made to Retired Partners is capital in nature. 4.2 The learned CIT erred in law as well as on facts in observing that payment made to Retired Partners cannot be considered for the purpose of Business or Profession. 4.3 The learned CIT erred in disregarding the provisions of the Partnership Deed and stating that the Retired Partners are entitled to receive only capital balance as on the date of retirement. 4.4 The learned CIT failed to appreciate the binding obligation created on the firm by t....
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....to the direction of the learned CIT has made the addition of Rs. 1,05,30,092.00 on account of the payment made to the retiring partners which was reduced from the professional receipt of the assessee. The learned AR also drew our attention on the addition made by the AO in the order framed under section 143(3) read with section 263 of the Act dated 8 August 2018 which is available on record. The relevant extract of the order of the AO is reproduced as under: "5. Subject to the above remarks and from the data made available, total income of the assessee is recomputed as under: Amounts (Rs.) 1. Total income as per order giving effect to the order of Ld.CIT(A)-4, Ahmedabad dated 25.07.2017 Rs. 3,8....
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....rsed. The benefits derived by the retiring partners for the services provided to build income of the firm should be considered as goodwill which is capital in nature and shall by no means be deducted from the income of the partnership firm. It is observed from the submission of the appellant firm that being a firm of Chartered Accountants it maintains its books of accounts on cash basis and the partners play a pivotal role in the rendering of professional services. As a matter of practice, the appellant firm raises memo of fees on the client on completion of engagement. The income in respect of professional fees gets booked only on receipt of professional fees from the client. Similarly, at any given point of time, there are several ongo....
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....'s own case for A.Y 2012-13 wherein I decided the issue in favour of the appellant considering the issue is squarely covered by the judgement of Hon'ble Bombay High Court, of Chennai and Mumbai Tribunals and order of my predecessor for AY 2014-15. In view of above facts and the ratio laid down by the case laws(Supra) there is a case for the appellant. It is mentioned that a similar issue was decided accepting the claim of the appellant vide order dated 26 October 2018 for AY 2012-13. The AO is directed to delete the impugned addition of Rs. 1,05,30,092/-. This ground of appeal is allowed. 5.1 The learned AR further claimed that the Revenue has not filed any appeal before the Tribunal against the finding of the learned CIT (A). ....