TaxTMI 
TaxTMI 
2021 (11) TMI 324
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....ified in deleting the disallowance made by the Assessing Officer by invoking provisions of Section 80(IA)(10) r.w.s. 10AA(9) in giving deductions of interest on Capital and Remuneration to partners of the assessee firm after finding that the assessee had taken undue benefits of Section 10AA by not claiming interest on Capital and Remuneration to partners which resulted increase in exempted profit of the assessee? 2. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in not appreciating the fact that buy not providing interest and remuneration to the partners, the firm has claimed higher profits leading to higher claim of deduction u/s 10AA of the Act and thus, devoiding the revenue from due amount of ta....
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....on of Rs. 2,08,76,390/- in the following manner:- Name of the partner Amount of allowable remuneration to the partner computed as per section 40(b) Allowable interest to the partners of the firm on their capital @ interest is 12% per annum Shri Sailesh P Lukhi 4867323/- 19256/- Shri Nandesh P Lukhi 4867323/- 142737/- Smt. Jalapa S Lukhi 4867323/- 392238/- Smt. Neeeta N Lukhi 4867323/- 852867/- Total A+B = 2087631/- 3. The A.O. thereby restricted the eligible deduction to the extent of Rs. 1,28,29,529/-. Aggrieved by the disallowance on account of partners remuneration and interest on capital contribution the assessee field appeal before Ld. CIT(A). Before Ld. CIT(A) the assessee made detailed written submissio....
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....datory but discretionary for the assessee who have made such claim. The Ld. CIT(A) after considering the submission of the assessee, contents of the partnership deed and decision of Hon'ble jurisdictional High Court in the case of Pr. Commissioner of income Tax vs. Alidhra Taxspin Engineers Tax Appeal No.265 of 2017 dated 02.05.2017, wherein it was held merely incorporation of interest on partners' capital account and remuneration does not signify that same are in mandatory in nature. The Ld. CIT(A) also relied upon the order of ITAT Ahmedabad Benches in the case of M/s Al Reza Food vs. ITO Ward-2(4) Bhavnagar 2017 (3) TMI 1237 - ITAT Ahmedabad and directed the Assessing Officer to delete the disallowance made by the Assessing Officer f....
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.... that none of the partners shall be entitled to any remuneration. The Ld. AR for the assessee submits that there is no violation of law and the law authorize the assessee to make a tax planning. What is the only prohibition is avoidance of tax and not tax planning. The assessee has not avoided any tax rather made tax planning, which is permissible under law. Further no tax can be levied without the authority of law as mandated by Article 265 of the Constitution of India. The Ld. AR for the assessee submits that grounds of appeal raised by Revenue is in fact covered by the decision of Hon'ble jurisdictional High Court in the case of Alidhra Taxspin Engineers (supra) which is followed by Ld. CIT(A) while granting relief to the assessee. ....