TMI Blog2018 (7) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, we set aside the order of the CIT(A). The appeal of the assessee is allowed. - ITA No. 5571/DEL/2015 - - - Dated:- 11-7-2018 - Shri P. M. Jagtap, Accountant Member And Ms Suchitra Kamble, Judicial Member Appellant by : Sh. Gaurav Jain, Adv, Ms. Deepika Agarwal, Adv Respondent by Sh. Arun Kumar Yadav, Sr. DR ORDER Per Suchitra Kamble, JM This appeal is filed by the assessee against the order dated 22/07/2015 passed by CIT (A)-20, New Delhi for Assessment Year 2011-12. 2. The concise grounds of appeal are as under:- 1. During the relevant assessment year partnership firm had paid the remuneration of ₹ 57,63,506/- to its partners. The Ld.CIT(A) confirmed the disallowance made by A.O of ₹ 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply after considering the reply of the assessee. The Assessing Officer observed that Section 40(b) (iv) is not relevant here as it deals with payment of interest and Section 40(b) (v) deals with maximum permissible remuneration i.e. allowable as a deduction under the head profit and gains from business or profession. The Assessing Officer further observed that the Section know where provides for any calculation/quantification of partners remunerations. It is open to the partnership firm to decide the remuneration which is not in excess of the maximum permissible as per Section 40(b) (v). The Assessing Officer observed that Circular No. 739 dated 25/3/1996 made it clear that either the amount of remuneration has to be specified or the manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly it shall be calculated. 7. That the share and distribution of partners , remuneration, as in clause 6 above, amongst the partners shall be, as per the partnership deed. 8. That the yearly remuneration payable to the eligible partners, as above, shall be due to and credited to their respective capital accounts at the close of an accounting year when the final accounts of the partnership are drawn up. However, the remuneration so determined shall be deemed to have accrued evenly during the year on a month-to-month basis. 9. That the partners hereto shall withdraw from time to time amount from the partnership, as per amount available and determined for distribution; such withdrawals, shall be debited to their res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the Income Tax Act provisions pertaining to Section 40(b) (v) of the Act. The Ld. AR relied upon the following decisions:- Vaish Associates and ANR vs ACIT (WP(C) No. 2209/2013 order dated 08.04.2013 passed by Hon ble Delhi High Court). CIT vs Vaish Associates (ITA 50/2014 order dated 11.08.2015 passed by Hon ble Delhi High Court) Vaish Associates vs ACIT (ITA 1382/Del/2012 order dated 05.07.2013 passed by Delhi Tribunal) Durga Dass Devki Nandan vs ITO (342 ITR 17) CIT vs Asian Marketing (254 CTR 453) ACIT vs DCS International Trading (ITA 98 and 694/Del/2012 order dated 22.11.2013 passed by Delhi Tribunal) ITO vs Pulimoottil Silk House (19 SOT 4) Cochin Tri. Eqbal Ahmed Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration. The Tribunal has also considered the decision of the Hon ble Delhi High Court in case of Sood Brij Associates. In-fact, in the present case also, this decision will not be applicable as in that case. In Sood Brij Associates though the partners were equally distributing the remuneration yet it was on the terms of mutual agreement of the partners which might have element of uncertainty of the remuneration. There was no method given in the partnership deed in that particular case. Therefore, the Hon ble Delhi High Court decision in case of Sood Brij Associated will not be applicable in the present case. In the present case, the Hon ble Delhi High Court s decision dated 11.08.2015 in case of Vaish Associates will be applicable. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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