9911796707
TMI Blog2011 (4) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... esh A. Shroff & ?Co., and A & M & Harilal Shroff & Co. She filed return of income for the year under consideration on 28th October 2005. The total income consisted of salary at ₹ 48,72,000 taxable under section 28(v) of the Income Tax Act, 1961 (for short "the Act") and share of profit of ₹ 50,59,250, which is received from the firms in which she is a partner and which is claimed as exempt under section 10(2A) of the Act. In the computation of total income, she claimed expenditure of ₹ 5,02,151, consisting of salary paid to driver, car expenses, car depreciation against remuneration received from a partnership firm. The Assessing Officer partly disallowed on ad-hoc basis the expenditure claimed on the ground that personal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal car expenses of the family which is not claimed by them and the same argument is accepted by the Jt. Commissioner of Income Tax, 11(3), in A.Y. 2007- 08. 3. The Commissioner (Appeals) erred in taxing refund of municipal received during the year which is of earlier year in absence of any charging section." 4. We have heard Mr. Rasesh V. Parikh, learned Counsel for the assessee and Mr. Surendra Kumar, learned Departmental Representative for the Revenue. Learned Counsel's contention is that, before joining the firm as a partner, the expenditure incurred by the assessee on maintenance of the motor car were partly disallowed @ 15%, on the ground that there is a personal element involved. After formation of the partnership firms, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) has accepted the alternate plea of the assessee and granted relief, the learned Counsel, though not leaving this ground, submitted that the issue need not be adjudicated in view of the relief granted to the assessee. 6. Learned Departmental Representative, on the other hand, relied on the orders of the Assessing Officer as well as the Commissioner (Appeals) and took this Bench at Para-5.1 contained at Pages-6 & 7 of the Commissioner (Appeals)'s order and pointed out that the assessee had failed to prove the direct nexus so as to establish that the expenditure were attributable to the earning of remuneration from the firm. He also submitted that the assessee has not adduced any evidence to demonstrate that cars are separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 15% in this year also. The expenditure incurred on the car was wholly and exclusively for the purpose of profession and, hence the ad-hoc disallowance is hereby deleted. (ii) Now, coming to the application of provisions of section 14A, the firm in which the assessee is a partner, is not paying remuneration and conveyance allowance or car allowance separately. As a matter of policy, a consolidated sum is paid as remuneration and the partner is required to incur expenditure on its own. Under these circumstances, in our opinion, the expenditure incurred wholly and exclusively for the purpose of earning remuneration which is being brought to tax under section 28(v). The share of income of the firm has no nexus with the expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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