TMI Blog2013 (11) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... date of filing of the return - The amended provision clearly states that the expression “said due date” used in clause A of proviso to unamended section refers to time specified in Section 139(1) of the Act. The amended section 40(a)(ia) expands and further liberalises the status when it stipulates that deductions made in the first eleven months of the previous year but paid before the due date of filing of the return, will constitute sufficient compliance - Decided against Revenue. - ITA No. 98/Del/2012, ITA No. 694/Del/2012 - - - Dated:- 22-11-2013 - Shri R. P. Tolani And Shri J. S. Reddy,JJ. For the Petitioner : Shri Sameer Sharma Sr. DR For the Respondent : Shri Suresh Anantharaman CA ORDER Per R. P. Tolani, J. M: These are cross appeals one by the assessee and the other by the Revenue against CIT(A) s order dated 31-10-2011 relating to A.Y. 2008-09. Respective grounds are as under: Revenue s appeal (ITA no. 98/Del/2012): 1. Whether in the facts and circumstances of the case, the CIT(A) has erred in deleting the disallowance in the hands of the firm under section 40(b) of salary/ remuneration to partners. CIT(A) citing the case of Durga Dass D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first appeal where it was pleaded that clause 6 of the partnership deed clearly provided the scale of remuneration payable by the assessee as under: 6. That all the parties shall be working partners and they shall be paid an annual remuneration in commensurate with their time devoted and services provided by them for carrying on business of the firm and they shall be allowed to withdraw such amounts during the year for their personal expenses, which shall be adjusted against their annual remuneration. And the above remuneration can be less/more according to the business of the firm, subject to the limits prescribed under the provisions of section 40(b) of the Income Tax Act, 1961 to which each of the working partner is entitled to as under:- i) The remuneration payable to the partners shall be calculated at percentage of the income of such accounting period as may be prescribed under the Income tax Act, 1961 or any other provision as may be in force in the Income Tax assessment of the partnership firm for the relevant accounting period. ii) And for the purpose of above calculation Income , other than long term capital gain, shall be computed as defined in explanation 3 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion provided in assessee s partnership deed is not clear and specific, therefore, the same has been rightly disallowed by assessing officer in terms of section 40(b). Reliance is placed on Hon ble Delhi High Court judgment in the case of Sood Brij Associates Vs. CIT (ITA no. 1154 of 2011 order dated 4-11- 2011), which is in favour of the revenue. In that case the Hon ble Delhi High Court held that remuneration of the partners was not properly specified in the partnership deed, therefore, the same was disallowed. 5. Ld. Counsel for the assessee, on the other hand, contends that the judgment in the case of Sood Brij Associates (supra) is not applicable to the facts of assessee s case inasmuch as it was a question of supplementary partnership deed dated 1-4-1992. The remuneration clause of the partnership deed as reproduced in the order of High Court is totally different than the assessee s partnership deed clauses in this behalf. In the case of Sood Brij Associates (supra), the same are as under: 1. That subject to mutual consent of the partners, and subject to the provisions of the Income Tax Act, 961, the working partner or partners shall be paid such remuneration as ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing officer. 7. Ld. Counsel for the assessee, on the other hand, contends that it has not been disputed that the TDS in question was paid by the assessee to the govt. treasury on 31-3-2008 i.e. last day of the accounting year. The assessing officer disallowed the expenditure on the allegation that the TDS though deducted in earlier months, were not deposited within the due date. CIT(A) held as under: 4.2. During the appellate proceedings, the appellant s AR raised an alternative plea that direction may be issued to the A.O to allow the expenditure of Rs. 7,70,677/- in the assessment year 2009-10. In view of the above decision of ITAT Special Bench which makes it clear that expenditure incurred is to be allowed in the year in which TDS is deposited in the government account as per provision to 40(a)(ia) of the I.T. Act, 1961, I hereby direct the A.O to grant the deduction of expenditure of Rs. 7,70,677/- in the A.Y. 2009-10. However, ground no. 2 of the appeal is rejected in view of the above decision of the ITAT Special Bench mentioned above. 7.1. Thus, the CIT(A) though dismissed assessee s ground at the same time, gave a direction to allow the same in A.Y. 2009-10. Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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