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TMI Blog2017 (10) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s/ 40(a)(ia) of the Income-tax Act, 1961, for non deduction of tax at source on interest paid to financial institutions. 2. That on the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) grossly erred in sustaining a disallowance of Rs. 2,36,916/- u/s 40(b)(ii) of Income-tax Act, 1961, in respect of remuneration paid to partner Shri Rajiv Jain. 3. That on the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) grossly erred in sustaining an addition Rs. 20 000/- on account of interest income from M/s Yash Pharma. 4. That on the facts and in the circumstances of the case and in law and in the principles of natural justice, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure at 10% on telephone expenses, car running maintenance exp., Running & Maintenance of vehicles, depreciation on Cars. Against this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions partly allowed the appeal. Thereby, the Ld. CIT(A) deleted the addition of Rs. 50,000/- made on account of lump-sum disallowance. Further, the Ld. CIT(A) confirmed the addition on account of non-deduction of tax excessive payment of salary. Further confirming the addition made on account of non-disclosure of receipt from Yash Pharma. Against this, the assessee preferred the present appeal before this Tribunal. 3. Ground No. 1 is against non-deduction of tax in respect of the interest paid to financial institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on record and gone through the order of the authorities below. Ld. CIT(A) in para 3.4.2 has decided this issue by observing as under:- "3.4.2. Determination:- (i) The appellant firm is constituted by two partmers i.e. Sh. Rajeev Jain and Sh. Sanjeev Jain and it paid remuneration of Rs. 6 lac to only one partner Sh. Rajeev Jain. The total remuneration as per the partnership deed dated 07.12.2004 payable to the partners worked out to Rs. 7,26,168/- by the AO in the assessment order. The AO, in view of the terms and conditions of partnership deed determined the remuneration payable to each partner at Rs. 3,63,084/- i.e. 50% of Rs. 7,26,168/- and thus disallowed the excess claim of Rs. 2,36,916/-(6,00,000- 3,63,084) u/s 40(b) (ii) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the income chargeable under the head 'profit and gains of business or profession'. (v) As per clause 13 of the partnership deed, the profit sharing ratio between the two partners was 50% each. It is evident from clause No. 6 of the partnership deed that the total allowable remuneration shall be shared amongst the working partners in their profit sharing ratio or as being mutually agreed amongst them. Thus both Shri Rajeev Jain and Shri Sanjiv Jain were having 50% share each in the allowable remuneration i.e. Rs. 3,63,084/- each. As per provisions of section 40(b) of the Act, the remuneration which is paid to a working partner and, is not authorized by, or is not in accordance with, the terms of the partnership deed can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... biguity into the provisions, if any remuneration is paid in excess of the amount mentioned or the percentage mentioned in the partnership deed that is not allowable expenditure. Therefore, we do not see any infirmity into the order of the Ld. CIT(A), same is hereby affirmed. This ground of appeal is dismissed. 5. Ground no. 3 was sustaining the addition of Rs. 20,000 on account of interest income from M/s Yash Pharma. 5.1 Ld. Counsel for the assessee reiterated the submissions as made in the written brief. He submitted that the amount is offered for taxation on receipt basis this being revenue neutral would not make any difference. Therefore, he urged that the addition may be deleted. 5.2 On the contrary Ld. D/R supported the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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