Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 1880 - AT - Income TaxDisallowance u/s 80(IA) r.w.s. 10AA(9) in giving deductions of interest on Capital and Remuneration to partners of the assessee - CIT-A deleted the addition after finding that the assessee had taken undue benefits of Section 10AA by not claiming Interest on Capital and Remuneration to partners which resulted increase in exempted profit of the assessee - whether CIT(A) is justified in not appreciating the fact that by not providing interest and remuneration to the partners, the firm has claimed higher profits leading to higher claim of deduction u/s 10AA of the Act and thus, devoiding the revenue from due amount of tax? - HELD THAT:- In the present case undisputedly in the partnership deed there is no clause providing payment of interest on capital and remuneration to the partners therefore, the ld. CIT(A) was right in denying application of order of Meridian Impex [2013 (9) TMI 605 - ITAT RAJKOT] in favour of the Revenue in the present case having distinct and dissimilar facts and circumstances The appellant has not charged any interest and remuneration asper partnership deed therefore, the appellant firm cannot be compelled to charge interest or remuneration. Therefore, we are inclined to hold the ld. CIT(A) was right in observing that the disallowance made by the AO on account of non provision of interest and remuneration of s. 10AA of the Act deduction is erroneous and incorrect and law and facts as in the peculiar facts of the present case the partnership deed clearly lays down that no interest and remuneration is payable and hence, the first appellate authority right in deleting the disallowance made by the AO on account of non provision of interest and remuneration from amount of deduction u/s. 10AA - Decided in favour of assessee.
|