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2016 (6) TMI 794 - AT - Income TaxDisallowances of the provision of entry tax liability under section 43B - Held that:- Following the double entry system of accounting, the appellant has created a liability by way of a provision towards the entry tax and a corresponding asset in its balance-sheet and there is no charge/transfer of provision to the profit/loss account. The appellant has been consistently passing these entries for the earlier years as well, i.e, the assessment years 2008-09, 2009- 10. Given that there is no claim of provision of entry tax in the profit/loss account and, hence, in the absence of a claim of an expense, the question of section 43B getting attracted does not arise at the first place. Section 43B postulates a situation where the expense otherwise allowable under the Act is subject to disallowance on non-fulfilment of the conditions stipulated therein. Unlike claim of depreciation where the statute stipulates a mandatory allowance of depreciation even if not claimed, there is no such statutory provisions in respect of the claim of statutory liability which even though not claimed but would still be deemed to be allowed for tax purposes. CIT(A) correctly deleted the addition - Decided in favour of assessee Disallowance of remuneration to the partners - Held that:- The remuneration has to be worked out based on certain percentage of the book profit which will be determined at the end of the year. It is also provided that the total amount of the remuneration so worked out is to be shared equally amongst all the three partners and in case of loss, no salary would be allowable to the partners. The CBDT circular similarly provides that where either the quantum or the manner of quantification of remuneration to the partners has been specified in the partnership, the same shall be allowable under section 40(b)(v) of the Act and not otherwise. In the instant case, given that the salary has been made a function of annual book profit which can be determined only at the end of the year, the exact quantum of remuneration has not been specified. At the same time, the partnership deed clearly provides for the manner of quantification of remuneration. It is not a case simpliciter that the partners have left the doors open to claim the remuneration as per section 40(b)(v) of the Act which apparently is the backdrop for issuance of CBDT Circular No. 739, dated March 25, 1996. Given the clear fact and CDBT guidance which rather supports the case of the appellant than the Revenue, the learned Commissioner of Income-tax (Appeals) has rightly deleted the disallowance where is hereby confirmed - Decided in favour of assessee Disallowance of depreciation - absence of valid documentary evidence in support of purchase of truck during the year - Held that:- Commissioner of Income-tax (Appeals) has given a categorical finding that the truck was registered in the name of assessee which is not disputed before us and the wrong mentioning of seller's name appears to be clerical error. He, accordingly, allowed depreciation of ₹ 31,800 which is hereby confirmed - Decided in favour of assessee
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