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M/s Cardiac Care Consultants Versus Joint Commissioner of Income Tax

2016 (6) TMI 372 - ITAT JAIPUR

TDS u/s 194C - payment of AMC charges - Held that:- It is undisputed fact that the assessee had paid the whole amount of ₹ 75,000/- during the year under consideration but as claimed by the AR that it is below the prescribed limit but the year under consideration, the limit was ₹ 50,000/- U/s 194C of the Act. The case law cited by the assessee is squarely applicable, therefore, additions confirmed by the ld CIT(A) under both the heads is deleted. - Decided in favour of assessee
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es had not allowed the remuneration computed on the basis of Section 40(b)(v) of the Act but it is fact 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 squarel .....

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ave 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 For the Assessee : Shri B.V. Maheshwari (CA) For the Revenue : Mrs. Roshanta Meena (JCIT) ORDER Per T. R. Meena, A. M. This is an appeal filed by the assessee against the order dated 25/03/2013 of the .....

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(a)(ia). This is also covered by the decision of Merillin Shipping 70 DTR 81. 3. That the ld A.O. as well as Ld. CIT(A) grossly erred in disallowing the electricity expenses ₹ 5566/-. 4. That the ld A.O. as well as Ld. CIT(A) grossly erred in not allowing the remuneration paid to partners U/s 40(b) ₹ 26,40,000/-. The remuneration have been paid. 2. The assessee filed its return of income on 29/09/2009 declaring total income of 60,80,880/-. The assessee is engaged in the hospital busi .....

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ed a sum of ₹ 1,27,641/- under the head printing and stationary expenses. The ld Assessing Officer gave reasonable opportunity of being heard, which was availed by the assessee vide letter dated 11/11/2011. After considering the assessee s reply, the ld Assessing Officer held that the assessee had failed to furnish necessary details regarding AMC charges of ₹ 70,000/- and no TDS had been deducted on it, therefore, he disallowed this amount and also disallowed the printing expenses on .....

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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 .....

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- during the year under consideration but as claimed by the AR that it is below the prescribed limit but the year under consideration, the limit was ₹ 50,000/- U/s 194C of the Act. The case law cited by the assessee is squarely applicable, therefore, additions confirmed by the ld CIT(A) under both the heads is deleted. 6. Ground No. 3 of the assessee s appeal is against confirming the disallowance of electricity expenses at ₹ 5,556/- by the ld Assessing Officer on the basis of bill r .....

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s or in case of emergency, therefore, it was incurred for the business purposes, which is allowable deduction. At the outset, the ld DR has vehemently supported the order of the ld CIT(A). After considering both the sides, no new facts have been come before us. The assessee has not been able to establish that these expenses were incurred wholly or exclusively for the business purposes, therefore, we uphold the order of the ld CIT(A) on this ground. 7. Ground No. 4 of the assessee s appeal is aga .....

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Annexure-8 and claimed that partnership deed is allowed remuneration to the partner U/s 40(b) of the Act. After considering the assessee s reply and clause-12, 13 and 14 of the partnership deed executed on 22/11/2006, he held that remuneration 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 categ .....

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n 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 thereby erred in not allowing the remuneration paid to partners ₹ 26,40,00 .....

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duction on the basis of various decisions on this issue. He relied on the decision of Hon ble Himachal Pradesh High Court in the case of Durga Dass Devki Nandan Vs. ITO (2011) 241 CTR 180 (HP) wherein it has been held that CBDT cannot issue a circular which goes against the provisions of I.T. Act. The CBDT can only clarify the issue but cannot execute the terms and conditions, which are not part of the main statute. A reading of Section 40(b)(v) clearly shows that amount of remuneration which do .....

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the remuneration payable for individual working shall be not exceeding maximum limit laid down in Section 40(b)(v) of the Act, therefore, he prayed to allow the appeal. 10. At the outset, the ld DR has vehemently supported the order of the ld CIT(A). 11. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee has provided in partnership deed for remuneration as under:- 12 The remuneration payable individually to working partners sha .....

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on 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 o .....

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As such this clarification amendment is made in the partnership deed on this 31st day of March, 2007 at Kota. The assessee had debited remuneration on the basis of Section 40(b)(v) of the Act, which was ratified by the amended partnership deed, the same has been furnished before the Assessing Officer as well as CIT(A) during the course of hearing but both the authorities have relied CBDT circular No. 739 dated 25/3/1996 and had not accepted the assessee s claim but this circular has been conside .....

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