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2021 (8) TMI 29 - AT - Income TaxDeduction u/s 10AA - assessee has not claimed interest on the capital of partners and their remuneration - HELD THAT:- AO relied on the decision of Rajkot Tribunal in Meridian Impex [2013 (9) TMI 605 - ITAT RAJKOT] and held that non-charging of interest and remuneration thereof has been done to enhance the profit of eligible exempt income. AO worked out the interest and remuneration and thereby restricted the claim of section 10AA. CIT(A) deleted the disallowance by following the decision of Jurisdictional high Court in Alidhara Taxspin Engineers [2017 (5) TMI 1684 - GUJARAT HIGH COURT] and also held that in the partnership deed it is clearly mentioned that no interest on capital or remuneration is payable to the partners. We find that the Hon'ble Gujarat High Court in Alidhara Taxspin Engineers (supra) held mere incorporation of interest on partners’ capital account and remuneration does not signify that the same is mandatory in nature. The case of the assessee is rather on the better footing, as the clause in the partnership deed clearly spelt out that no interest on capital of partners or remuneration is payable to the partners. We do not find any merit in the grounds of appeal raised by the revenue. The case law relied by Ld. CIT-DR is not helpful to the revenue after the decision of Hon'ble Gujarat High Court in Alidhara Taxspin Engineers (supra). - Decided against revenue.
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