9911796707
TMI Blog2023 (11) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... arrived at between two partners towards the expenditure incurred at that time and, therefore, it is not the amount paid to the retiring partner. HELD THAT:- As carefully gone through the registered settlement deed, wherein, it clearly shows that the amount was paid to the retiring partner in terms of settlement arrived at between two partners for giving up his interest in the partnership firm, there cannot be any dispute that the amount paid to a retiring partner for giving up his interest in the partnership firm is a capital expenditure. See Sangam Enterprises [ 1999 (6) TMI 16 - ANDHRA PRADESH HIGH COURT] and Standard Makings Allied Products Corpn [ 1997 (1) TMI 49 - GUJARAT HIGH COURT] CIT(A) without appreciating proper facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.13,40,50,885/- which includes an amount of Rs.5,60,73,319/- paid to retiring partner, namely, Kumar Housing Corporation Limited. The factual background of the issue was explained by the assessee vide his letter dated 30.11.2016, which is extracted by the Assessing Officer vide para no.4.1 of the assessment order, which reads as under :- "Sarsan Developers Private Limited (SDPL) and Kumar Housing Corporation Limited (KHCL) had entered into an agreement forming a Registered Firm namely Sarsan Kumar Developers (SKD) on 21.10.2006, to develop its property located at No.367+368+ 369+372+373+374, Narayan Peth, Laxmi Road, Pune 411 030. The Market conditions was of recessionary Nature during 2009 to 2013 due to which Kumar Housing Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer was of the opinion that the amount paid on retirement of partner cannot be allowed as deduction and, accordingly, added to the closing work-in-progress by disallowing the same as deduction u/s 37(1) of the Act. 4. On appeal before the ld. CIT(A), the ld. CIT(A) held that the provisions of section 45(4) of the Act has no application and, therefore, disallowance of payment by holding to be capital expenditure is not justified, it should be allowed as revenue expenditure. 5. Being aggrieved by the decision of the ld. CIT(A), the Revenue is in appeal before us in the present appeal. 6. It is contended on behalf of the Revenue that the ld. CIT(A) without appreciating proper facts of the case wrongly held that the amount paid to the reti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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