9911796707
TMI Blog2012 (11) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER: This is an appeal filed by the assessee against the order dated 29.04.2011 passed by the ld. CIT(A), Gwalior for the Assessment Year 2007-08. 2. The assessee has raised the following grounds of appeal :- 1. On the facts in the circumstances of the case, the learned CIT(Appeal) was not justified in confirming AO s order disallowing the salary of ₹ 497656 paid to the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, the A.O. noticed that in the partnership deed dated 01.04.2001 the assessee firm had neither specified the amount of remuneration payable to each working partner nor lays down the manner of qualification of such remuneration. The A.O. disallowed the remuneration to partner invoking provision of section 40(b)(v) of the Income Tax Act, 1961 ( the Act hereinafter). The A.O. relied upon the C.B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slation cannot virtually set at naught the provisions of the main statute. A reading of s.40(b)(v) clearly shows that amount of remuneration which does not exceed the amount given in the IT Act is deductable. The CBDT in Circular No.739, dt. 25th March, 1996 has provided that either the amount of remuneration payable to each individual should be fixed in the agreement or the partnership deed shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). This section does not lay down any condition of fixing the remuneration or the method of remuneration in the partnership deed. All that the section provides is that in case the payment of remuneration made to any working partner is in accordance with the terms of the partnership deed and does not exceed the aggregate amount as laid down in the subsequent portion of the section the deduction is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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