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2014 (11) TMI 473 - AT - Income TaxClaim of deduction on business expenses incurred for earning remuneration from the firm - assessee a qualified Chartered Accountant was a partner in two firms - Whether authorities were justified in disallowing the claimed deduction on account of business expenses on running, maintaining and on account of depreciation on motor car for earning the income from profession – Held that:- Following the decision in Commissioner of Income-Tax, Bihar Versus Ramniklal Kothari [1969 (3) TMI 1 - SUPREME Court] - the assessee has claimed that the expenditure on maintenance and running of car was incurred by him for the purpose of discharging his professional duties as a partner of the firm - the expenditure on running and maintenance of the car was incurred by the assessee for the purpose of earning share income and remuneration from the firm - the assessee has received remuneration in addition to the share of profit from the firms, the expenditure incurred by the assessee for running and maintenance of motor car is to be allocated between the share of profit from the firms and remuneration from the firm - This allocation has to be made on the proportionate basis i.e. the expenditure on running and maintenance of motor car, depreciation etc. is to be allocated in proportion of share of profit from the firms and the remuneration received from the firms – thus, the AO is directed to allow the proportionate deduction in respect of running and maintenance of motor car and depreciation against the remuneration received from the firm – Decided partly in favour of assessee. Unexplained cash deposits - Whether the authorities below are justified in making and sustaining the addition for unexplained cash deposits out of cash earlier withdrawn – Held that:- There was cash deposits in the bank account aggregating to ₹ 52,60,000/- which are clearly covered by earlier withdrawals of ₹ 54,65,000 - there is no reason to doubt the explanation of the assessee that the deposits were from the earlier withdrawals - The period of paring the money withdrawn ranging from 123 days to 8 days is also not so long to doubt the explanation of the assessee that the money was kept for the purchase of land for which dealing was going on but ultimately could not be materialized - There is a need to verify the claim of the assessee that these withdrawals from the bank were kept intact and were not used for house hold expenditure as the entries accounted for in the cash book maintained in this regard furnished by the assessee were exclusive of house hold withdrawals – thus, the matter is remitted to AO for verification – Decided in favour of assessee.
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