TMI Blog2012 (7) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... ually forming part of the bills raised by the contractee who deducted tax at source on payment to the assessee in accordance with the provisions of the I.T.Act – disallowance deleted - ITA No.292/CTK/2012 - - - Dated:- 25-5-2012 - Shri K.K.Gupta, Shri K.S.S.Prasad Rao, JJ. For the appellant: Shri D.K.Seth/M.Seth/K.Seth, ARs For the respondent Shri A.Naik, DR ORDER Shri K.K.Gupta, AM : This is an appeal filed by the assessee against the order dt.30.3.2012 of the Commissioner of Income-tax (Appeals) for the Assessment Year 2008-09. 2. The assessee has raised the following grounds of appeal. 1. For that under the facts and circumstances of the case the order of the learned Commissioner is arbitrary and bad-in-law. 2. For that the order of assessment appears to have been back dated and hence is barred by limitation for although the same is dt.24.12.2010 ,that the same was not ready for service till 30.01.2011. 3. For that the addition of ₹11,52,000 by way of disallowing the claim of Remuneration to Partners is wholly unjustified and the learned A.O. as well as the learned Commissioner failed to appreciate the submissions and explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity who considered the case of the assessee appellant before him and confirmed these two disallowances by indicating that Circular No.739 dt.25.3.1996 of the CBDT instructed that when the amount for determination for remuneration to the partners remains undeterminable at the end of the accounting period would not be allowed as deduction in computation of firm s income. On the second issue, the learned CIT(A) upheld the disallowance by misdirecting himself that an extra bonus should have formed part of the TDS Certificate in Form 16A to the drivers. The learned CIT(A) negated the claim of the assessee that it was an expenditure not to be claimed separately for reimbursement. Aggrieved, the assessee is in before the Tribunal on these issues. 5. The learned Counsel for the assessee initiating his arguments submitted that the learned CIT(A) erred in holding a view being instruction of the CBDT when the said instruction has been done away with by the Hon ble Himachal Pradesh High Court, Shimla in the case of M/s.Durga Dass Devki Nandan v. Income-tax Officer in ITA No 4 of 2005 dt.11.3.2011 (copy produced) which decision is on the prime contention that the Circular has to be read along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer having satisfied himself at the threshold rightly indicated by way of a remand report submitted that there was no fresh evidence put forth by the assessee for consideration before the learned CIT(A) and the issue being taken up before the learned CIT(A) was considered by the Assessing Officer in the original proceedings. In other words, the learned CIT(A) ought to have accepted the fact that the reimbursement was purely a goodwill gesture on the part of the assessee who ought to have reduced the same from the gross receipts amounting to ₹28.38 Crores when he chose to claim the same separately in the P L account amounting to ₹63,84,528 being the accounting standard under the mercantile system of accounting. He submitted that both these additions may be directed to be deleted as disallowance thereof has no basis in the eyes of law as per the facts and circumstances which both the authorities below have found uncontroverted. 6. The learned DR submitted that the learned CIT(A) has confirmed the disallowance on the basis of facts and findings brought on record by the Assessing Officer which he fully supported for his part of submissions. 7. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular without adjudicating the issue on the basis of facts brought on record by the assessee. Therefore, we direct the Assessing Officer to allow the claim of ₹12 lakhs being the remuneration paid to the partners. 8. On the second issue, we are more concerned with the fact that the Assessing Officer took recourse to submit the remand report by obstructing the deliberation for the judgment on appeal by the assessee before the learned CIT(A). In other words, the learned AO appears to have superimposed his disallowance of the expenditure being the drivers commission claimed in the P L account amounting to ₹63,84,525 when he was apprised of the fact that the assessee was asked by the contractee to include the amounts paid to the drivers by them so that the payments under the transport charges become conclusive. The learned Counsel for the assessee had submitted the sample copies of the bills raised, ledger copy of the contractee and also the financial statements when the sum of ₹28.38 Crores transportation charges receipt resulted in net income of ₹69,69,000 after remuneration to the partners amounting to ₹12 lakhs. No infirmity has been pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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