2022 (1) TMI 334

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....ng Officer ("Ld. AO") is bad in law. 2. That the Learned Commissioner of Income Tax (Appeals) ("Ld. CIT(A)) has erred in law and facts in confirming the order of the Ld. AO in respect of disallowance of amount of statutory dues payable as on the last day of the previous year and paid within prescribed due dates on the ground that the appellant is following cash system of accounting. 3. That on the facts and circumstances of the case the Ld. CIT(A) has erred in law and facts in confirming the disallowance made by Ld. AO on account of TDS payable in the assessment order and concluding that 'tax' as referred in section 43B of the Act doesn't include tax deducted at source by the appellant. 4. That on the facts and circumst....

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....isallowance. The Appellant has filed a rectification request for adjudication of the aforesaid grounds of appeal before Ld. CIT(A). 8. The above grounds are without prejudice to each other. 3. Ground No.1 is of general in nature and needs no separate adjudication. 4. Ground No.2, 3 and 4 are interlinked and relate to the disallowance of expenses shown as payable in the balance sheet. 5. During the course of the scrutiny assessment proceeding the AO noticed that the assessee has shown statutory liabilities of Rs. 381146/- on account of TDS payable, Rs. 30135/- on account of EPF contribution and Rs. 4,700/- on account of Profession Tax. Since the assessee was following cash system of accounting the AO was of the opinion that accrued li....

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....remuneration is as per the relevant provisions of the Act and the same deserve to be allowed. 13. Per contra the DR strongly supported the findings of the lower authorities. 14. We have carefully considered the orders of the authorities below. There is no dispute that there is a specific provision in the partnership deed in respect of payment of remuneration to partners. It is also not in dispute that bonus paid to partners is part of the remuneration. This means that the total allowance of the remuneration to partners has to be judged in the light of the provisions contained section 40(b) of the Act. The AO is directed to verify whether the overall remuneration including bonus is within the permissible limit of the relevant provisions of....