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TMI Blog2016 (9) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon’ble Supreme Court in the case of Reliance Petroproducts (P) Ltd (2010 (3) TMI 80 - SUPREME COURT ). Respectfully following the ratio of decision of Hon’ble Supreme Court in the case of Reliance Petroproducts (P) Ltd (supra), we hereby direct the Assessing Officer to delete the penalty on the addition made on account of disallowance of remuneration paid to the working partner. Thus, this ground of the assessee’s appeal is partly allowed. - ITA No. 292/Ahd/2012 - - - Dated:- 29-6-2016 - Shri Anil Chaturvedi, Accountant Member And Shri Kul Bharat, Judicial Member Assessee by : Shri Pritesh Shah, AR Revenue : Shri Rajdeep Singh, Sr DR ORDER Per Shri Kul Bharat, Judicial Member This appeal by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC) and the judgment of Hon ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton Ginning Factory, reported in (2013) 359 ITR 565 (Karnataka) in support of his contention that the assessee has neither concealed the particulars of his income nor furnished any inaccurate particulars of income. He submitted that in case of shortage of stock, the Assessing Officer has treated the same as unaccounted sales without having any evidence on record and in the case of remuneration to partner, there was a double taxation since the assessee firm as well as partner, both comes under the highest slab of income tax rates; thus, in case of remuneration, there is no loss of revenue to the Government. He contended that no tax is evaded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be paid to a working partner who is an individual because only the individual can render services as a working partner for the firm. As per the facts of the case, the remunerations of ₹ 5,16,537/- and ₹ 4,16,606/- were actually paid to Shri Rajhesh Agarwal as a working partner respectively for himself and as a representative director of the company. Thus, in fact remuneration of ₹ 9,33,143/- was paid to only one person for rendering the services as a working partner but the amount of ₹ 4,16,606/- was shown to be paid to the company as above in a representative capacity. No any separate services were rendered by Shri Rajesh Agarwal on behalf of the company as a representative working partner. It is evident from rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold 33.164 MT of stock outside its books of account. The so called shortage claimed was therefore, actually tantamount to furnishing of inaccurate particulars of income. The Assessing Officer was justified in holding that the assessee has furnished inaccurate particulars of income in its return of income and also justified in levying the penalty u/s 271(1)(c) of the Act. The penalty levied for furnishing of inaccurate particulars of income with reference to shortage of stock is hereby confirmed. 4.1 So far the penalty levied on account of shortage of stock, it was incumbent upon the assessee to give true and fair picture of the stock. Since the assessee failed to do so, in our considered view, the penalty levied on this amount cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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