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2022 (9) TMI 580 - AT - Income TaxPayment of remuneration to working partner - Addition u/s 40(b) - remuneration was paid to the partner in view of the amended deed - HELD THAT:- The assessee has apportioned the remuneration which comes to Rs.7,13,709/- but paid only a sum of Rs.6 lakhs and claimed deduction of the same. We noted from the CIT(A)’s order that he noted that the assessee has not supported the basis of allocation by any document produced and according to him, the said document was executed before the close of financial year is not very clear. Assessee before CIT(A) categorically made representation in the written submissions that the deed was amended w.e.f. 01.01.2012 by the amended deed dated 12.01.2012 that means the partner Smt. Kanchan Devi became working partner from January, 2012 and for three months, she is entitled for remuneration. The entire details was available before CIT(A) i.e., partnership deed, the computation of book profit and allocation of remuneration to this working partner Smt. Kanchan Devi. Assessee has rightly allocated Rs.6 lakhs rather it is less because if we allocate the remuneration to working partner which comes for these three months. We are of the view that the assessee has rightly claimed the payment of remuneration to working partner Smt. Kanchan Devi in term of provisions of section 40(b) and CIT(A) as well as AO both erred in not allowing the claim. We allow the claim and reverse the orders of lower authorities. - Decided in favour of assessee.
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