TMI Blog2012 (11) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- In such a situation, provision contained in section 14A will come into operation and any expenditure incurred in earning the share income will have to be disallowed. We find that the CIT(A) at relevant point of time was not having the benefit of the Special Bench decision in case of Shri Vishnu Anant Mahajan (2012 (6) TMI 297 - ITAT, AHMEDABAD). Issue Remand back to AO Disallowance of Depreciation on vehicle against income u/s 10(2A) – Held that:- Section 14A deals only with the expenditure and not any statutory allowance admissible to the assessee. A statutory allowance u/s 32 is not an expenditure, hence it cannot be subject matter of dis-allowance u/s 14A. Following the decision in case of Hoshang D. Nanavati (2011 (3) TMI 89 (Tri)) – Remand back to AO Addition on account of Agricultural Income – AO observed that books seems to have been written in one sitting, self-made bills – AO made reject agricultural income and consider the same as Income from other source - Held that:- The claim of the assessee has been rejected mainly on account that earning from the crops shown by the assessee were not tallying with the 7/12 extract which is the record of crop on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with Dr.B.S.Kollur, Nephrologist, since Jan. 2007 onwards. Ours is a common mess and joint family of parents and four brothers. I am alone to look after the hospitalisation and all other activities. Therefore, it was beyond my reach to make the legal compliances. Taking into consideration, severe physical and mental condition of my brother and father I had given priority to the hospitalization and their treatment. In view of the facts stated above, it is my humble request that the delay may please be condoned and appeal may please be admitted since I was prevented by sufficient and genuine reasons stated here in above. In this background, it was submitted that brother of assessee was under treatment for his accident at the relevant point of time so he could not file the appeal in time. It is possible that in case brother of assessee is fighting for his life after accident, his priority for filing the appeal in time may be disturbed. According to us, the assessee was prevented by reasonable cause in filing the appeal and so the delay is directed to be condoned and the matter is restored to the CIT(A) with a direction to decide the appeal at hand by a speaking order after provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d income, the assessee claimed depreciation on motor car of Rs.1,47,750/- and vehicle expenses of Rs.30,832/- aggregating to Rs.1,78,582/-, after deducting 20% of the depreciation and vehicle expenses as personal expenses. The Assessing Officer disallowed the same on the ground that there was no nexus between remuneration received and maintenance of the vehicle. In this background, stand of the assessee is that he being working partner of the firm, a return of income of the firm was also submitted. On verification of the record, the Assessing Officer accepted the remuneration from the firm, interest on capital and share of the profit. According to the Ld. Authorised Representative, he is a working partner and required to attend the firm for day to day work of the firm. By virtue of the provisions of section 37(1), any expenditure incurred wholly and exclusively for the purpose of earning of profit is allowable. The CIT(A) rejected the claim of the assessee by observing that the assessee and the firm M/s. S.P.Wines, in which the assessee is a partner, are two distinct legal entities and therefore, it is the firm and not the assessee who is carrying out the business. In order to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the firm on one hand and the partners on the other hand. Even earlier, the salary and interest allocated to the partners were taxable as business income. The real change in the scheme of taxation is that the firm is taxed at a flat rate of income after deduction of interest and salary paid to the 'partners, and interest and salary are taxed in the hands of the partners as business income. Thus, it is clear that the amount taxed in the hands of the firm is not taxed again in the hands of the partners. This change has led to avoidance of double taxation because the firm does not have to pay tax on salary and interest income paid to the partners and the partners do not have to pay tax on share income allocated to them. This is achieved by insertion of section IO(2A) and 28(v) in the Act. In so far as share income is concerned, the field is occupied by the tax law, as it is enacted that the share income shall not form part of total income of the partners. Therefore, in view of this specific provision and the fact that the firm and partners are separately assessable entities, it will be difficult to hold that the share income is not excluded from the total income of the partner b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Bench decision in the case of Vishnu Anant Mahajan (supra). 7. The remaining issue is with regards to addition of agricultural income of Rs.69,805/-. The assessee has shown net agricultural income of Rs.2,09,805/-. On examination of books maintained by the assessee in this regard, the Assessing Officer observed that books seems to have been written in one sitting and did not appear to be genuine. Only self made bills were maintained and assessee had no genuine record in support of purchase of fertilizers, seeds and for payment of labour charges. The Assessing Officer further observed that although the assessee has claimed to have sold crops like bajra, groundnuts, S.F.Seeds and harbhara, the 7/12 extracts filed by the assessee did not support the claim of the assessee since such crops were never produced by him. On account of the inconsistency and non-maintenance of proper record, the Assessing Officer did not accept the agricultural income of the assessee of Rs.2,09,508 and restricted the acceptance to Rs.1,00,000 only. Balance amount of Rs.1,00,000/- shown by the assessee was added by the Assessing Officer to the income of the assessee as income from other sources. In appe ..... 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