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TMI Blog2017 (1) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... salary paid to the partners in those years. The method followed by the assessee in the instant case amounts to claiming of the expenditure twice, i.e. in the year when the assessee has debited such expenses to the cost of the flats as there was no profit and again during the impugned assessment year when there is profit. This definitely amounts to double deduction. Therefore, do not find any infirmity in the order of the CIT(A) upholding the action of the Assessing Officer in disallowing the expenditure . - Decided against assessee. - ITA No.1431/PUN/2016 - - - Dated:- 30-12-2016 - SHRI R.K. PANDA, AM For The Appellant : Shri S.G. Bhutada For The Respondent : Shri Suhas Kulkarni ORDER PER R.K.PANDA, AM : This a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e partners was credited to the partner s capital account and the said account are now debited to the P L a/c. of the current year when there is profit for the first time. Similarly interest @12% PA for both the F.Ys were also debited during said F.Y. interest and salary to the partners have been shown by the partners in their return of income. I therefore request your honour to kindly allow the said expenditure. 3. However, the Assessing Officer was not satisfied with the above explanation given by the assessee. According to him, as per the provisions of section 36 37 of the I.T. Act, 1961 the expenses of earlier years are not allowable. Referring to the decision of Hon ble Madras High Court in the case of Cairn Energy India Ltd. repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as debited the proportionate cost of these flats/apartments to the profit and loss account. While doing so, assessee has transferred the above said interest and salary to partners already accounted for during the respective assessment years to the profit and loss account. It was argued that the firm has not accounted for this expenditure during the year under consideration. The expenditure was accounted for during those respective years for which they relate. There is no double deduction of any expenditure. It was accordingly argued that the addition made by the Assessing Officer should be deleted. 5. However, the CIT(A) was not satisfied with the arguments advanced by the assessee and confirmed the addition made by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld. Accordingly, the Ground No.1 of the appeal is dismissed. 6. Aggrieved with such order of the CIT(A) the assessee is in appeal before the Tribunal with the following grounds : 1. The Ld.CIT(A) erred in confirming the disallowance of expenditure of ₹ 4,70,990/- as follows : Interest to partners for A.Y. 2005-06 ₹ 3,70,990/-. Salary to partners for A.Y. 2005-06 ₹ 50,000/- Salary to partners for A.Y. 2006-07 ₹ 50,000/- 2. The Ld.CIT(A) erred in not distinguishing the peculiar nature of business of the appellant and time cycle to ascertain the income from business of the firm. 3. The Ld.CIT(A) erred in concluding that the appellant firm has once again made the actual payment of interest and sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions relied on by the Assessing Officer in the body of the assessment order. I find the assessee in the instant case has debited an amount of ₹ 9,00,195/- under the head other expenses which includes interest and salary to partners for A.Y. 2005-06 and 2006-07 to the tune of ₹ 4,70,990/-, the details of which are already given at Para 2 of this order. I find the Assessing Officer disallowed the same on the ground that the expenditure of the preceding assessment years cannot be claimed as deduction during the year. I find the Ld.CIT(A) confirmed the addition made by the Assessing Officer on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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