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2016 (7) TMI 1185 - AT - Income TaxDisallowance on account of remuneration to partners - Held that:- We find that the assessee computed the remuneration as per Section 40(b) of the Act and credited 50% each to both the partners. The AO did not dispute the fact that remuneration was paid to the partners. Secondly, this amount was taxable in the hands of partners and if the same is disallowed in the hands of assessee firm then it would be result in double taxation. In view of the above facts and circumstances of the case and the case laws cited by the ld. AR of the assessee, we feel that the ld. CIT(A) has rightly directed the AO to delete the addition. - Decided in favour of assessee. Addition on account of profit element in sales returns - Held that:- It emerges from the records that the assessee furnished the details of the amounts deducted by its clients in earlier years and the same was communicated to the assessee during this year which cannot be treated as bad debt. Hence, we find no reason to interfere with the order of the ld. CIT(A) which is sustained - Decided in favour of assessee. Disallowance of transportation expenses - Held that:- We feel that the ld. CIT(A) has rightly restricted the addition towards transportation expenditure to the extent of ₹ 26,537/- considering the facts and circumstances of the case of the assessee. Hence, we find no reason to interfere with the order of the ld. CIT(A) which is sustained.- Decided in favour of assessee. Addition on account of unexplained investment in construction of hotel building - construction expenditure was determined by the DVO - Held that:- We restore the issue to the file of the AO to recompute the self supervision charges at 7.5%( as done by DVO) instead of 12.5% as determined by the by the ld. CIT(A). As regards the cost of construction, the rate of PWD, Rajasthan shall be applied instead of CPWD rates. - Decided partly in favour of revenue for statistical purposes.
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