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TMI Blog2018 (7) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance made by A.O of Rs. 57,63,506/- stating that remuneration is not allowable." 3. The assessee is a Chartered Accountant Firm by profession and derived income from business or profession. Return of income declaring at Rs. 36,92,340/- was filed on 30/09/2011 and the same was processed u/s 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny. Notice u/s 143(2) of the Act was issued and served upon the assessee. In response to the notice, the Chartered Accountant of the assessee attended the proceedings from time to time and field the necessary details information/documents is required. Books of accounts and vouchers were produced during the course of assessment proceedings which we have heard both the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be specified or the manner of quantifying such remuneration has to be specified if it is not so remuneration cannot be allowed as deduction u/s 40(b) (v). Relying on the decision and the Hon'ble Delhi High Court the Assessing Officer held that partnership deed in the present case does not defined the quantum of remuneration nor the method of computation of remuneration paid to the partners for the previous year 2010-11 relevant to the Assessment Year 2011-12. Therefore, the Assessing Officer disallowed Rs. 57,63,506/- as regards remuneration paid to the partners. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee by confirming the order of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir respective current / capital accounts arid the same shall be adjusted against their salary and other amounts due to them from the firm and credited to their respective current / capital accounts at the end of the year. 10. That the Net Profit / Loss of the partnership business, as per the accounts maintained by the firm, after deducting all expenses relating to the business of the partnership including rent, salaries and other establishment Expenses, as well as interest arid remuneration payable to the partner/s in. accordance with this deed of partnership or any supplementary deed, as may be executed by the partners, shall be divided and distributed amongst the partners in the manner as explained and detailed out hereunder:- S. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been clearly set out in Clause 6 as well as in Clause 10 of the partnership deed. Therefore, the CIT(A) as well as the Assessing Officer by following the ratio of the Hon'ble Delhi High Court in case of Sood Brij & Associates has rightly disallowed the claim of remuneration. 8. We have heard both the parties and perused the material available on record. After perusal of the partnership deed in the assessee's case it can be seen that the CBDT Circular in Clause 4 has categorically mentioned that even the method of quantification can be accepted as per the provisions of Section 40(b) (v) of the Act. Besides that the Hon'ble Delhi High Court in case of CIT Vs. Vaish Associates has also given the finding that when the remuneration is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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