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2015 (10) TMI 2024 - AT - Income TaxDeduction of interest and salary paid to partners u/s 40b (IV) and 40 b(V) - order u/s 144 - CIT(A) allowed the claim - Held that:- Undisputedly the Assessing Officer has afforded various opportunities to the assessee to produce complete books of account, bills and vouchers, etc. for verification. But the assessee did not produce the books of account and relevant evidence to justify the claim of expenditure, etc. In the absence of complete books of account, the Assessing Officer had no option but to proceed under section 144 of the Act for best judgment assessment. The dispute is raised with regard to further deduction of interest and salary paid to partners and firm in terms of section 40b(iv) and 40b(v) of the Act from the net profit estimated by the Assessing Officer. The provisions of section 184(5) of the Act is very clear and according to which no further deduction can be allowed by way of any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made to any partner of such firm While issuing directions for allowance of interest and salary paid to partners, the ld. CIT(A) has not examined the provisions of section 184(5) of the Act. Therefore, we are of the view that the findings of the ld. CIT(A) are contrary to the provisions of the Act and we accordingly set aside the order of the ld. CIT(A) in this regard and restore that of the Assessing Officer. - Decided in favour of revenue. Undisclosed income under section 68 - CIT(A) disclosed the addition - Held that:- Details of the cash deposit in the bank be re-examined in the light of the cash book duly maintained by the assessee. Therefore, it requires a proper verification by the Assessing Officer. During the course of hearing, our attention was also invited to the fact that while making addition on account of cash deposit in bank, the Assessing Officer has also examined the sundry creditors of ₹ 29.05 lakhs, but he has not made any addition of ₹ 29.05 lakhs, as he has made an addition of ₹ 42.08 lakhs on account of cash deposit in the bank. Therefore, once the matter is restored back for verification of cash deposits, sundry creditors of ₹ 29.05 lakhs be also verified. Accordingly we set aside the order of the ld. CIT(A) and restore the matter to the Assessing Officer with a direction to re-adjudicate the issue by making necessary verification with regard to the cash deposit of ₹ 42.08 lakhs and sundry creditors of ₹ 29.05 lakhs. If need be, sundry creditors may also be summoned for verification. The assessee is also directed to produce all the relevant books of account to justify the cash deposits in the bank and sundry creditors. Accordingly, the order of the ld. CIT(A) is set aside and the matter is restored to the Assessing Officer to re-adjudicate the issue in terms indicated above. - Decided in favour of assessee for statistical purposes.
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