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2016 (8) TMI 1037 - ITAT JAIPURRevision u/s 263 - allowably of expenditure - Held that:- The assessee has stated that he was partner in various partnership firms. In respect of the expenses, the assessee also stated in that reply about the expenditures incurred and deduction claimed. The AO after considering the submissions allowed the claim of the assessee in respect of deduction/expenditure. Now the question arises is whether the AO erred in allowing the expenditure. The ld. Counsel for the assessee has placed reliance on the judgment of the Hon’ble Jurisdictional High Court rendered in the case of CIT vs. Jabarmal Dugar (1971 (7) TMI 17 - RAJASTHAN High Court ). We find that the Hon’ble High Court has held that the expenditure was allowable. The Hon’ble Calcutta High Court in the case of CIT vs. S.B. Ghose (1980 (6) TMI 27 - CALCUTTA High Court ), after considering various judgments held that – When the income of a partnership is allocated t the different partners of a firm, the partners are entitled to have their income assessed in accordance with law, that is to say, under section 28 of the I.T. Act, 1961. In making that assessment, a partner of the firm, being an assessee, is entitled to all the deductions allowable under the Act. In order to earn the income as a partner of a firm, a partner of a firm has to do some work and he has to incur certain expenses, e.g., holding consultation for the work of the firm at one’s residence or acts done in order to facilitate or earn the income as a partner of the firm. Such expenditure was allowable. In view of these judgments, the act of the AO cannot be termed as erroneous. Therefore, on this ground invoking of provisions of section 263, in our considered view was not justified. Excessive claim of deduction under section 80C allowed - Held that:- From the details filed in the paper book, it transpired that the assessee has claimed deduction on gross amount paid to the school. However, out of this gross amount, the assessee was entitled for deduction to the extent of tuition fee alone. Therefore, the AO erred in allowing the deduction on gross amount. But looking to the amount involved, in our considered view, the ld. CIT should have given direction to the AO as he is empowered to do so to restrict the claim to the extent of allowable deduction instead of setting aside the assessment order. As per section 263, the ld. CIT is empowered to modify the assessment. Thus the direction issued by the ld. CIT is modified. The AO is directed to restrict the deduction to the extent of ₹ 56,749/- claimed under section 80-C.
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