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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 ..... n paid to partner Shri Rajiv Jain - Held that:- Since the partnership deed allows expenditure of remuneration paid to the partners in the ratio as recorded in the partnership deed paying less to one partner and paying in excessive of the ratio so fixed, in our considered view would not help the assessee. The only explanation of the assessee is that the other partner has no objection to this effect. In our view, there is no ambiguity 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. Additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned Commissioner of Income Tax (Appeals) grossly erred in sustaining an addition ₹ 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 learned Commissioner of Income Tax (Appeals) grossly erred in not allowing sufficient opportunity of being heard to the appellant and also to furnish additional documents/evidences for adjudication in the interest of justice. 5. That the appellant craves to add, amend, alter, modify, substitute or delete any ground or grounds of appeal on or before the hearing of the appeal. 2. Briefly stated the facts are that the case of the assessee was picked up for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 institutions. 3.1 Ld. Counsel for the assessee reiterated the submissions as made in the written brief. 3.2 On the contrary, Ld. D/R opposed the submissions. 3.3 We have heard the rival contentions, perused the material available on record. During the course of hearing, Ld. Counsel for the assesee submitted that the financial institutions have disclosed this receipt in their return of income. This fact requires to be verified at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 payable to the partners worked out to ₹ 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 ₹ 3,63,084/- i.e. 50% of ₹ 7,26,168/- and thus disallowed the excess claim of ₹ 2,36,916/-(6,00,000- 3,63,084) u/s 40(b) (ii) of the Act. ( ii) During the appellate proceedings, it was the contention of the appellant that as per partnership deed, it has been agreed amongst the partners that the salary shall be given to the partners looking after the affairs of the firm and who are known as working partners in the manner as agreed between them. Shri Rajiv Jain has been paid ₹ 6,00,000/- as remunerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers 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. ₹ 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 cannot be allowed as a deduction. ( vi) The appellant firm has paid remuneration of ₹ 6 Lac to Shri Rajeev Sain which is not in accordance with the terms of the partnership deed. During the appellate proceedings, the AR placed reliance on the decision of Hon'ble ITAT, Amritsar in the case of ITO vs. J.M.P Enterprises [2006] 101 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground no. 3 was sustaining the addition of ₹ 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 the authorities below. 5.3 We have heard the rival contentions. The Ld. CIT(A) has given a finding on fact in para 3.5.2 as under:- 3.5.2 Determination: ( i) The AO noted that the appellant has shown interest income of ₹ 60,000/- from M/s Yash Pharma whereas as per 26AS statement, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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