TMI Blog2016 (6) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... act that the assessee had quantified remuneration on the basis of partnership when CIT have coterminous power with A.O. and the assessee has submitted modified partnership before him and Hon’ble Himachal Pradesh High Court decision on this issue in the case of Durga Dass Devki Nandan Vs. ITO (2011 (3) TMI 20 - HIMACHAL PRADESH HIGH COURT) was relied upon by the AR of the assessee, which is squarely applicable on the facts of the case. He was not justified to confirm the addition on account of remuneration of partner. The documents produced by the assessee before the Assessing Officer did not have any room to drawing presumption and reaching conclusion that such a document was produced was not genuine. Therefore, amended partnership deed cannot be doubted by the ld CIT(A) in the case of assessee. By following the decision of Hon’ble Jurisdictional High Court on this issue, we have considered view that the assessee is rightly entitled for deduction of remuneration paid to the partners. Accordingly, we reverse the order of the ld CIT(A) on this ground - Decided in favour of assessee - ITA No. 406/JP/2013 - - - Dated:- 31-5-2016 - Shri T. R. Meena, AM And Shri Laliet Kumar, JM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a)(ia) of the Act, which was confirmed by the ld CIT(A) by observing that in view of Section 40(a)(ia) of the Act gets invoked as soon as the amount becomes payable and credited to the account of the payee and it does not make any different if the same was paid later or simultaneously or earlier. 3. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that the assessee had paid AMC charges during the year under consideration as per agreement and payment is below specified limit prescribed U/s 194C of the Act. He further argued that the ld CIT(A) has not appreciated the fact of decision in the case of Merilyn Shipping (2012) 70 DTR 81. Later on the Hon ble Allahabad High Court in the case of CIT Vs. M/s Vector Shipping Services Pvt. Ltd. 357 ITR 642 has applied the Special Bench decision and held that if the amount already paid, no TDS is required to be made by the payer. The SLP in this case also dismissed by the Hon'ble Supreme Court. Therefore, the additions confirmed by the ld CIT(A) are not justifiable and may be dismissed. 4. At the outset, the ld DR vehemently supported the order of the ld CIT(A). 5. We have heard the rival contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emuneration had not been quantified in the copy of partnership deed. He further referred CBDT circular No. 739 dated 25/3/1996, since the assessment year made under consideration is 2009-10, which is subsequent to A.Y. 1996-97, the last para of the circular has categorically applied. Accordingly, he disallowed remuneration paid to the partners at ₹ 26,40,000/-. 8. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed this addition by observing that so called amendment in the partnership deed was an afterthought, the same was done to create a new case. Additional evidence is, therefore, not admitted. As in the original deed filed before the Assessing Officer, there was no provision for payment of remuneration. The ld Assessing Officer has rightly disallowed the same. 9. Now the assessee is in appeal before us and also filed modified grounds of appeal on this issue vide letter dated 14/4/2016, which is as under:- That the ld CIT(A) grossly erred in not admitting the additional evidence. (The additional evidence was filed to clarify the clause of remuneration given in the partnership deed) and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the relevant accounting year. 14. The partners shall be entitled to revise the mode of calculating the above remuneration as may be agreed upon by and between them from time to time. Such remuneration shall be calculated at the close of the accounting year and partners shall be entitled to draw out the remuneration for their personal needs from time to time. Thereafter the assessee filed revised partnership deed before the Assessing Officer and ld CIT(A) and clause -12 has been modified as under:- The above said clause is un-completed to over sight, hence it is to be read as under: Clause No. 12: The partners shall be paid remuneration to the extent of allocable and available surplus out of Net Profit of the firm at the year end. 1. Dr. Rakesh Jindal 60% allocable Surplus or ₹ 30,000 Whichever is higher. 2. Dr. Saket Gloyal 40% allocable Surplus or ₹ 20,000 Whichever is higher. However, the amount credited or paid in year ending every year as per books of account on account of remuneration to partners shall be treated as remuneration paid to the partners. The calculation of remuneration shall be restricted as per the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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