TMI Blog2004 (10) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... er, ultimately, the constitution of the firm changed and was constituted by three partners, namely, Shri Prakash Chand, Shri Babu Lal and Shri Hasti Mal. Due to the changes introduced by the Finance Act, 1992, with regard to assessment of the firms and amendments made in the provisions of s. 40(b) of the IT Act, 1961, a new deed of partnership was executed on 3rd April, 1992, and in this instrument of partnership, the following clause, with regard to payment of salary to the working partners was introduced by cl. (5) which reads as under : "(5) That all the parties have agreed to keep themselves actively engaged in conducting the affairs of the business of the partnership firm as working partners. It is hereby agreed that in consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act for all the years, i.e., from 1993-94 to 1999-2000. The AO was of the opinion that the salary paid to partners of the firm in the capacity of Karta of their HUF was not allowable as the salary paid to individual is only allowable. The AO passed orders for all these years and made addition of the salaries paid to partners of HUF as Karta of HUF. 5. In appeal, the CIT(A), however, allowed the claim of the assessee. Now, the Department is aggrieved. 6. At the very outset, it was brought to our notice by the learned Authorised Representative, Shri Rajendra Jain, that the issue is squarely covered by various decisions of the Tribunal including the decisions of this Bench in the cases of: (1) Shri Kishan Chand Harish Chand vs. Asstt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 6,890 0.64 35,304 1995-96 10,18,650 6,100 0.60 29,991 1997-98 20,47,532 12,368 0.60 70,841 1998-99 18,36,928 9,172 0.50 53,601 1999-2000 38,08,528 14,971 0.40 75,125 12. This is evident from the above chart that the claim of shortages ranges from 0.40 per cent to 0.60 per cent which is less than 1 per cent. When the shortage is less 1% in such cases, it has been held consistently by various decisions of this Bench that this shortage can be treated as negligible and hence no addition can be made on this count. 13. The following decisions relied by the learned Authorised Representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , respectively, on account of alleged excessive shortage. The assessee has maintained proper books of account. The entire purchases are supported by vouchers. The complete quantitative details have been maintained. The office of Indian Oil Corporation vide their letter dt. 26th June, 1996, have confirmed that 1 per cent handling loss should be allowed to the dealers on total receipts. Thus, the oil company regards 1 per cent shortage as normal shortage. Shortage claimed by the assessee in diesel and petrol account in the year under consideration is less than 1 per cent. The books of account have been audited. No trading additions have been made in the past years. On a careful consideration of the entire relevant facts, we are of the view th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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