2025 (11) TMI 988

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....sessment Year 2016-17. 2. The assessee has raised the following grounds of appeal: 1. On the facts and circumstances of the case as well as law on the subject, Lt. CIT(A) has erred in confirming disallowance of expenses claimed against business income amounting to Rs. 9,99,872/- 2. On the facts and circumstances of the case as well as law on the subject, Ld.CIT(A) has erred in disallowing proportionate expenses amounting to Rs. 9,99,872/- without considering that the same has been incurred wholly for the purpose of earning business income. 3. On the facts and circumstances of the case as well as law on the subject, Ld. CIT(A) has erred in disallowing proportionate expenses amounting to Rs. 9,99,872/- without co....

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....irm by way of Interest on capital, remuneration and share of profit from the various partnership firms. He has filed his Return of Income declaring Total Income of Rs. 26,76,660/- and claimed expenses to the tune of Rs. 10,83,194/- as allowable business expenses against business income 5.4 The A.O. had rejected the claim of the appellant stating that the expenses incurred during the year pertain to all the firms on account of common usage hence only proportionate deduction of the expenses is allowable to the appellant. Therefore, it is logical to conclude that the expenses claimed by the assessee have been incurred with respect to all the firms from wherein the assessee is deriving the exempt income. Hence, deduction of complete ex....

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....ietorship and the two firms where he is a working partner. He earned Rs. 4,55,348/- as remuneration and Rs. 7,93,756/- as profit from these firms. It was argued that the expenses relate only to the firms where he is actively involved and not to the others. Therefore, the Assessing Officer wrongly disallowed Rs. 9,00,872/- by assuming that he worked in only one firm, whereas he was a working partner in two firms and also actively managed his proprietorship business. 7. We have carefully considered the rival submissions and perused the material available on record. It is observed that the Assessing Officer made a proportionate disallowance of expenses on the erroneous assumption that the assessee was a working partner in only one firm, whe....