TMI Blog2017 (12) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... owing the order of the Hon’ble Delhi High Court. During the appeal hearing, the Ld.DR did not place any other decision to controvert the reliance placed by the Ld.CIT(A). Since the CIT(A) allowed the assessee’s appeal following the decision of Hon’ble Delhi High court, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. Appeal of the revenue is dismissed. Addition towards partners’ remuneration - enhanced remuneration paid to partner - Held that:- As gone through the partnership deed and in the partnership deed with regard to payment of remuneration,there was a clause for increase/decrease of remuneration as per mutual consent before the end of the financial year. In the instant case, there were only two pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A)- 2/VSP/C-1,KKD/2016-17dated 23.09.2016 for the A.Y. 2012-13. 2. The assessee filed return of income declaring total income of ₹ 2,03,750/-. The assessment was completed u/s 143(3) on total income of ₹ 58,15,640/-. During the assessment proceedings, the assessing officer(AO) made the following additions : (i) Disallowance of partners remuneration ₹ 4,94,000 (ii) Disallowance of Finance charges u/s 40(a)(ia) ₹ 50,46,643 (iii) Disallowance of payments u/s 40A(2)(b) ₹ 71,250 3. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition in respect of partners remuneration of ₹ 4,94,000/- and the Finance charges of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) verified the Form 26AS and found that M/s Sundaram Finance Ltd. has admitted the income of ₹ 5,21,695/- and M/s Shriram Transport Finance Co. Ltd. has admitted a sum of ₹ 32,01,933/- in their return of income for the assessment year under consideration. Following the decision of Hon ble Delhi High Court in the case of CIT vs. Ansal Landmark Township P. Ltd. (377 ITR 635 Del.), the CIT(A) has deleted the addition of ₹ 37,23,628/- and confirmed the balance amount of ₹ 13,23,025/-. 6. Aggrieved by the order of the Ld.CIT(A), the Revenue is in appeal before us. We have heard both the parties and perused the material placed on record. During the previous year relevant to the assessment year 2012- 13, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his return of income and filed the same, no disallowance u/s.40(a)(ia) of the Act can be made by the AO in view of the second proviso to section 40(a)(ia) read with first proviso to section 201(1) of the Act. This has been provided in the second proviso to section 40(a)(ia) inserted in the statute by the Finance Act, 2012 with effect from 1.4.2013. Therefore, on furnishing of certificate in form 26A as prescribed under proviso to section 201(1) read with rule 31ACB of the I.T. Rules no disallowance u/s 40(a)(ia) can be made. 6.2. As per the proviso, if the deductee admits the income and pays taxes on such income, the assessee is not deemed to be assessee in default and the disallowance u/s 40(a)(ia) does not attract. Though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s related to the addition of ₹ 4,94,000/- towards partners remuneration. During the assessment proceedings, the AO found that the assessee has debited a sum of ₹ 5,30,000/- towards partners remuneration. The AO found from the partnership deed that the partnership deed permits remuneration to the extent of ₹ 36,000/- only and accordingly made the addition of ₹ 4,94,000/-, relating to the difference between the remuneration claimed and permitted under partnership deed. 9. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition holding that the assessee failed to furnish any written agreement for increasing the remuneration. In the absence of written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the managing partner is provided and permitted in the partnership deed, hence, requested to allow the deduction. Further, the Ld.AR submitted that the entire remuneration paid to the managing partner amounting to ₹ 5,30,000/- was admitted as income in his hands and paid the taxes and filed the return of income, thus, further disallowance in the hands of the partnership firm amounts to double taxation of the same amount. 11. Per contra, Ld.DR supported the orders of the CIT(A). 12. We have heard both the parties and material placed on record. The assessee firm has paid a sum of ₹ 5,30,000/- to managing partner as remuneration. According to the AO, the partnership deed permits the payment of remuneration of ₹ 36,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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