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TMI Blog2022 (1) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is a specific provision in the partnership deed in respect of payment of remuneration to partners. It is also not in dispute that bonus paid to partners is part of the remuneration. This means that the total allowance of the remuneration to partners has to be judged in the light of the provisions contained section 40(b) of the Act. The AO is directed to verify whether the overall remuneration including bonus is within the permissible limit of the relevant provisions of section 40 (b) of the Act and if found so the same should be allowed. Disallowance of Vehicle Expenses, Depreciation on Car,Telephone Expenses, Depreciation on Telephone, Travelling Expenses andConveyance Expenses - HELD THAT:- Disallowances have been made on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and circumstances of the case the Ld. CIT(A) has erred in law and facts in confirming the disallowance made by Ld. AO on account of TDS payable in the assessment order and concluding that 'tax' as referred in section 43B of the Act doesn't include tax deducted at source by the appellant. 4. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the disallowance made by Ld. AO u/s 36(l)(va) of the Act, on account of deposition of employee's contribution to provident fund ignoring the fact that the appellant had deposited the aforesaid amount before due date of filing the return of income under the Act and was thus duly allowable u/s 43B of the Act. 5. That the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance sheet. 5. During the course of the scrutiny assessment proceeding the AO noticed that the assessee has shown statutory liabilities of ₹ 381146/- on account of TDS payable, ₹ 30135/- on account of EPF contribution and ₹ 4,700/- on account of Profession Tax. Since the assessee was following cash system of accounting the AO was of the opinion that accrued liability cannot be allowed as deduction when a person is following cash system of accounting and accordingly made the disallowances which were confirmed by the CIT(A). 6. Before us the counsel for the assessee vehemently stated that the payments have not been allowed even in the year in which the assessee has made the payments. 7. We find force in the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of payment of remuneration to partners. It is also not in dispute that bonus paid to partners is part of the remuneration. This means that the total allowance of the remuneration to partners has to be judged in the light of the provisions contained section 40(b) of the Act. The AO is directed to verify whether the overall remuneration including bonus is within the permissible limit of the relevant provisions of section 40 (b) of the Act and if found so the same should be allowed. 15. Ground No.5 is treated as allowed for statistical purpose. 16. The AO further found that the assessee in his books of account have claimed following expenses :- (a) Vehicle Expenses : ₹ 15,12,171 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance is called for. The DR supported the findings of the AO. 19. We have carefully considered the orders of the authorities below. It is not in dispute that the disallowances have been made on ad-hoc basis without pointing out any specific defect in the accounts. However, personal usage of vehicle/ telephone cannot be ruled out. We find that the CIT(A) has restricted disallowance to 5% on account of vehicle expenses and depreciation on car and has further restricted the disallowance on account of mobile phone expenses only to the personal usage of four persons, we do not find any error or infirmity in the findings of the CIT(A). Thus ground No. 6 and 7 are accordingly dismissed. 20. In the result, the appeal filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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