9911796707
TMI Blog2002 (1) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances of the case and in law, the learned CIT(A) erred in allowing remuneration of Rs. 24,276 to HUF partner Shri Prakash P. Patel ignoring the provisions of s. 40(b) of the Act that remuneration is allowable only to an individual who is actively engaged in the business of the firm as a 'working partner' and not a representative of the assessee." 2. The brief facts are that during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in conducting the affairs of the business or profession of the firm of which he is a partner. The assessee in reply has stated that remuneration has been given to the HUF and ladies partners and the remuneration so paid has been duly shown by these partners in their personal returns of income as their income. He has, therefore, stated that the remuneration paid may be allowed in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntirely and exclusively on the basis of share of profit. 3. The assessee carried the matter in appeal and learned CIT(A) upheld the disallowance of salary in respect of female partners. However, learned CIT(A) allowed the remuneration paid to Shri Prakash P. Patel, karta of HUF partner, keeping in view the principles laid down in the judgments reported as CIT vs. Kalu Babu Lal Chand (1959) 37 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. On the other hand, learned counsel appearing for the assessee supported the orders of authorities below. The counsel of the assessee submitted that Shri Prakash P. Patel represented the firm in his capacity as HUF. He is actually working and salary has been paid in lieu of services rendered by him for the firm. The counsel of the assessee also submitted that it is well settled that only indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee also. Shri P.P. Patel represents the firm in his capacity as karta of HUF. He has rendered services to the firm though he may also be rendering services/working for other firms as mentioned by AO in the assessment order. A person can work for one or more firms in accordance with his capacity when the firms are operating in one premises. Keeping in view the totality of the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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