Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 21 - AT - Income TaxDeduction u/s 80IB - CIT (A) allowing deduction u/s.80IB as restricted on account of allowable interest to partners and remuneration to partners by the AO - HELD THAT:- Before restricting / disallowing claim the AO has not issued show cause notice to the assessee. Before the ld.CIT(A), the assessee explained that the AO has not considered the partnership deed dated 01.04.2006 wherein the partners are not eligible for interest and remuneration. CIT(A) after considering the contents of partnership deed dated 01.04.2006 held that the AO himself accepted the contents of second partnership dated 01.04.2006 and its relevant causes and no such disallowance [interest and remuneration] has been made. We have perused the contents of assessment order for A.Y. 2013-14 dated 11.03.2016 passed under section 143(3) by same Assessing Officer. We find that the observation of ld.CIT(A) that no disallowances in subsequent assessment year is made by AO, are correct. The Hon'ble Jurisdictional High Court in PCIT vs. AL Reza Food [2017 (3) TMI 1237 - ITAT AHMEDABAD] held that mere incorporation of interest on the partner’s capital and remuneration does not signify that same are mandatory in nature. Considering the aforesaid factual and legal position, we affirm the order of ld.CIT(A). Appeal of the Revenue is dismissed.
|