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TMI Blog2011 (6) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... income has not accrued or arisen to the assessee. Therefore, the addition is deleted In view of the above, we do not find any infirmity in the findings of the CIT(A), as the same are based on proper appreciation of the legal and factual position of the case. - I.T.A. No. 319(Asr)/2010 - - - Dated:- 14-6-2011 - SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER For the Petitioner :Sh. Tarsem Lal, DR For the Respondent : Sh. Y.K. Sud, CA ORDER PER MEHAR SINGH, AM, The present appeal filed by the Revenue is directed against the order of CIT(A), Jalandhar, dated 29.04.2010, passed under section 250(6) of the Income-tax Act, 1961 ( hereinafter referred to in short the Act ) for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had received a sum of ₹ 43,81,102/- as her 50% share of profit in the firm M/s. Dynamech. However, the firm had not paid any interest to the partners though the partnership deed provided for such payment of interest @ 18% per annum. The AO also noticed that the partnership deed of M/s. Dynamech provided for payment of remuneration of ₹ 48,000/- per annum to each of the partners, but no such remuneration had been paid by M/s. Dynamech. The AO was of the opinion that M/s. Dynamech had not provided the interest and remuneration to the partners so as to claim higher deduction u/s 80IB on its profits. The AO gave a show cause notice to the assessee. On considering the reply of the assessee it was held that the assessee had increas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduce the relevant part of the decision of the CIT(A), for the purpose of proper appreciation of the same: 3.4. I have considered the rival submissions carefully. An identical issue has been decided in the case of Rohit Tandon, husband of the appellant, the other partner in M/s. Dynamech holding 50% share in the partnership firm for the assessment year 2006-07. In that case also, the AO had added the interest payable on the capital of Sh. Rohit Tandon and remuneration payable to Sh. Rohit Tandon to the total income of the assessee, I have adjudicated that appeal vide order dated 14.7.2009 in appeal No.591/08-09/CIT(A)/Jal and have deleted similar additions as under: 9.5 I have considered the rival submissions carefully. Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial year. Now, a partnership, by its very name and as per the provisions of Partnership Act is by will of the partners. There are only two partners in this firm, both having equal shares. The accounts drawn up at the end of the year reveal that no interest on the capital or remuneration to the partners has been provided in the accounts of the firm M/s.Dynamech. This act by itself signifies that the partners have agreed not to provide interest on their capital or to charge remuneration for their services. In my opinion, the terms of the partnership deed do not signify that interest on capital and remuneration to partners had necessarily to be provided in the account of M/s. Dynamech.. 9.7. The AO has drawn support from the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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