2002 (1) TMI 250

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....ed in the business of the firm as a 'working partner' and not a representative of the assessee." 2. The brief facts are that during the course of assessment proceedings, the AO found that assessee debited to the P&L a/c, inter alia remuneration paid to the partners as under: Name of the partners Amount of remuneration paid Rs. 1. Prakash P. Patel, HUF 24,276 2. Jyotiben P. Patel 71,400 3. Hemlata A. Patel 22,848 4. R.I. Patel 24,276   1,24,800 The AO also found that assessee-firm had paid remuneration to Shri P.P. Patel, HUF (Sr. No. 1) and two lady partners (S. Nos. 2 & 3) which is not allowable in view of specific provisions contained in Expln. 4 to s. 40(b) of the IT Act, 1961. The AO in ....

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....spect of female partners. However, learned CIT(A) allowed the remuneration paid to Shri Prakash P. Patel, karta of HUF partner, keeping in view the principles laid down in the judgments reported as CIT vs. Kalu Babu Lal Chand (1959) 37 ITR 123 (SC), Mathura Prasad vs. CIT (1966) 60 ITR 428 (SC), CIT vs. K.S. Subbiah Pillai (HUF) (1984) 147 ITR 87 (Mad) and D.N. Bhandarkar & Ors. vs. CIT (1986) 54 CTR (Kar) 223 : (1986) 158 ITR 724 (Kar). Aggrieved by the order of learned CIT(A), Revenue is in appeal before us. 4. At the time of hearing before us on behalf of Revenue Smt. Vibha Desai, learned Departmental Representative appeared and contended that it is unbelievable that karta of HUF was actually rendering any services to the firm because....