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2014 (7) TMI 496 - ITAT DELHIReopening of assessment u/s 148 of the Act Reasons recorded after issuance of notice u/s 148 - Opportunity of being heard - Held that:- The decision in AG HOLDINGS PVT LTD Versus INCOME TAX OFFICER [2012 (5) TMI 44 - DELHI HIGH COURT] followed - There are no two sets of reasons recorded by the respondent in the present case - The reasons were recorded on 9.3.2011 - the approval of the Additional Commissioner of Income Tax was obtained and thereafter notice u/s148 - there was a delay of 4 ½ months in supplying the reasons recorded by the AO the plea of the assessee cannot be accepted. Non-speaking order Held that:- The assessee was asked to show cause why salaries/ remuneration to the partners claimed as deductions be not disallowed u/s 40 (b) (v) - the partnership deed neither specified the amount of salaries required to be paid to each of the working partners not had laid down the specific method of quantification assessee chose not to file any objection and participated in proceedings - it cannot be said that the requirement of law regarding filing of objection by assessee to notice u/s 148 and disposing of the same by AO were not substantially fulfilled. Therefore, the re-assessment proceedings cannot be held to be bad in law Decided against Assessee. Deduction for remuneration paid to partners Held that:- Held that:- As decided in assessees own case for the earlier assessment year, it has been held that, the appellant has accepted that clause 2 does not quantify or provide the manner of computing remuneration payable to the partners but stipulates the maximum amount payable - the limits specified u/s 40 (b) (v) are incorporated and have become part and parcel of the partnership deed but not the amount or the quantum remuneration - payment was not in accordance with the terms of the supplementary partnership deed dated 1st April, 1992 though authorized by the deed - The remuneration was paid in terms of a subsequent understanding between the two partners regarding the quantum and the amount to be paid - the remuneration is not specified - The manner of computing the remuneration is not specified - the remuneration payable is left to future mutual agreement between the partners who are entitled to decide and quantify the quantum - Remuneration can be any amount or figure but not more than the maximum amount stated in Section 40 (b) (v) of the Act thus, the requirement of Section 40 (b) (v) are not satisfied Decided in favour of Revenue. Penalty u/s 271(1)(c) of the Act - Concealment of income and furnishing of inaccurate particulars of income - Held that:- The assessee had claimed the deduction in respect of remuneration paid to partners - it cannot be said that the claim advanced by assessee was in any manner malafide claim merely because the assessee was a CA firm - mere disallowance of claim does not per se attracts, panel provisions unless it is established that the claim advanced by assessee was malafide thus, there was no reason to interfere with the order of CIT (A) Decided against Revenue.
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