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TMI Blog2025 (1) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... eted u/s. 153A of the Act. Thus, in view of the ratio laid down in the case of Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] the additions made in A.Ys. 2014-15 to 2018-19 are unsustainable. Accordingly, we delete such disallowances. Remuneration paid to partner - AO initially was of the view that remuneration is not allowable in terms of section 40(b) but ultimately made the disallowance u/s. 37 which, in other words, means that the expenditure incurred is not for the purpose of business. As in the statement recorded u/s. 132(4) in response to a specific query raised, one of the partners of the assessee firm has specifically stated that Ms. Chhaya D. Vora helps in accounts maintenance of the firm and for that purpose she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in wrongly recording satisfaction u/s. 153A even though no incriminating documents were found from the premises of the Appellant which ought to have belonged to the Appellant. Additional Ground Number 2: In the facts and circumstances of the case and in law, the Assessing Officer erred in the said disallowance tantamount to double addition of same income in the hands of the Appellant even though the same is already taxed in the hands of the respective partners. Additional Ground Number 3: In the facts and circumstances of the case and in law, the Assessing Officer erred in passing the assessment order on the basis of approval granted u/s. 153D in a mechanical manner and without there being any incriminating material. 4. Since the additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned partner had submitted that the partners shall get remuneration as working partner. However, they did not come to office daily. It was stated that Ms. Chhaya D. Vora helps in accounts maintenance of the firm. Whereas, Shri Yash Vora helps in business. Relying upon such statement, the A.O. issued a show cause notice to the assessee, requiring to explain as to why the remuneration paid to Ms. Chhaya D. Vora should not be disallowed, as such expenditure is not for the purpose of business in terms of section 37 of the Act. Though, the assessee objected to the proposed disallowances, however, rejecting the explanation of the assessee, the A.O. disallowed the expenditures incurred by the assessee towards payment of remuneration to Ms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , strongly relied upon the observations of the A.O. and learned first appellate authority. 11. We have considered rival submissions and perused the materials on record. As could be seen from the facts on record, the search and seizure operation on the assessee took place on 16.10.2019. Therefore, as on the date of search and seizure operation, no assessment proceeding for A.Ys. 2014-15 to 2018-19 were pending. Therefore, for such unabated assessment years, the A.O. can have jurisdiction to assess or reassess any income purely based on incriminating material found as a result of search and seizure operation. In the facts of the present appeals, undisputedly, the only addition/disallowance made in all these assessments years are remuneration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Merely because she does not come to office on daily basis, cannot be a ground to hold that she is only a sleeping partner and, hence, not entitled to remuneration. In any case of the matter, the remuneration paid to partner is taxable at the hands of the partner u/s.28(v) of the Act. Undisputedly, the remuneration received has been offered to tax at the hands of the concerned partner. That being the factual position emerging on record, expenditure towards remuneration paid to the partner is certainly allowable at the hands of the assessee firm. Therefore, even for A.Ys. 2019-20 and 2020- 21, which are abated assessments, the disallowances cannot be sustained. Accordingly, we delete the disallowances in all the assessment years under dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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