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2022 (12) TMI 877 - AT - Income TaxDeduction u/s 40b - disallowance on account of interest paid to partners and on account of salary paid to partners - "admissible amount" - HELD THAT:- The certificate of C.A. is also placed on record at PBP 34 who conducted the Audit u/s 44AB of the Act alongwith computation of total income. Thus from these documents, it becomes clear that no addition could have been made by the AO. Revenue Authorities rejected the rectification application in a mechanical manner without going into the facts of the case. The Bench has also perused the CBDT Circular No. 14 (XL 35) of 1955 dated 11-04-1955 which is relevant in the present case as it has been categorically mentioned in that Circular that taxpayer should be guided by the AO to file the correct return and to allow him to the deductions which he is entitled under the Income Tax Act, 1961. In the instant case, instead of allowing the ‘’admissible amount’’, the AO on the contrary disallowed the amount without any justification and without looking into the reality of the facts of the case as the assesee was legally entitled for deduction. The Bench finds that Hon’ble Supreme Court in number of cases has held that real income should be assessed which in the Bench view has not been done in this case. Therefore, considering the totality of the facts and circumstances of the case, the Bench feels that the assessee is entitled to deduction u/s 40b of the Act and thus the AO is directed to delete the addition which has been made while relying upon the amount wrongly mentioned by the assessee in the column of ‘’inadmissible’’. Thus the appeal of the assessee is allowed.
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