TMI Blog2018 (2) TMI 1805X X X X Extracts X X X X X X X X Extracts X X X X ..... .B.Billimoria [2008 (12) TMI 671 - ITAT MUMBAI] is factually distinguishable. Case of CCIT vs C.C.Chokshi & Co.[2008 (7) TMI 1055 - BOMBAY HIGH COURT] to be followed. No infirmity in the order of the CIT-A in this regard. Accordingly, the grounds raised by the revenue are dismissed. Disallowance of interest on TDS - belated payment of TDS - Held that:- Assessee had merely made belated payment of TDS belonging to the payees and not the assessee. Hence the said interest which was paid for delayed remittance of TDS is only compensatory in nature. The decision relied upon by the ld CITA was in the context of payment of interest on payment of direct taxes and since the direct tax payment is not an allowable expenditure, the interest paid ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired partners in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is a firm of chartered accountants and had filed its return of income for the Asst Year 2012-13 on 28.9.2012 declaring total income of ₹ 10,70,28,740/-. Later the assessee filed a revised return of income on 31.3.2014 declaring total income of ₹ 10,70,28,740/- i.e same as original return and claimed TDS credit of ₹ 12,65,52,009/- as against the original TDS credit of ₹ 10,16,17,748/- and claimed consequential refund thereon of ₹ 9,34,80,130/- in the revised return. In the course of assessment proceedings, the ld AO sought to disallow the payment to retired partners in the sum of ₹ 1,58,56,741 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A) is contrary to law, facts and circumstances of the case. 2. The Ld. CIT(A) erred in deleting the disallowances made in respect of payment of ₹ 1,58,56,741/- made to retired partners claimed by the assessee on account of diversion of income by over-riding title. 2.1. The Ld. CIT(A) erred in deleting the disallowance without appreciating the fact that the provisions of Sec. 40(ba), clauses(i) (ii) of 40(b) allow deduction of expenditure only if remuneration is payable to any partner of the firm and not a retired partner. 2.2. The Ld. CIT(A) failed to appreciate that the payments made to retired partners are not diversion of income on account of over-riding title but mere application of income on account of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Court and placed the copy of the said order before us. Accordingly, he argued that the issue under consideration has been settled in favour of the assessee by the decisions of Hon ble Bombay High Court in the following cases :- a) CCIT vs C.C.Chokshi Co. in ITA No. 209 of 2008 and 193 of 2008 dated 25.7.2008 b) ACIT Vs A.F.Ferguuson Co. in ITA No. 87 of 2011 dated 21.7.2011 6. We have heard the rival submissions and perused the materials available on record. The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. We find that this tribunal had placed reliance on the decision of Mumbai Tribunal in the case of C.C.Chokshi Co., which was later approved by the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now settled by the two decisions of Hon ble Bombay High Court supra and respectfully following the same, we do not find any infirmity in the order of the ld CITA in this regard. Accordingly, the grounds raised by the revenue are dismissed. 7. Now let us come to Cross Objection of the assessee. 8. The Ground No.1 raised by the assessee in its cross objections is only supportive of order of the ld CITA and hence we do not deem it necessary to address the alternate claim made thereon by the assessee. 9. The only issue to be decided in the cross objections of the assessee is as to whether the ld CITA was justified in upholding the disallowance of interest on TDS of ₹ 1,18,902/- in the facts and circumstances of the case. 9.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by overriding title and not chargeable to tax, the Ld. CIT(A) ought to have appreciated that payment made to retired partners is incurred wholly for the purpose of carrying on the profession of the firm and as such the same is allowable as revenue expenditure under section 37(1) of the Act. 2. Disallowance of Interest on TDS ₹ 1,18,902/- 2.1. The Ld. CIT(A) erred in confirming the order of the Assessing Officer ( AO ) in concluding that interest on TDS of ₹ 1,18,902/- is not an allowable deduction. 2.2. The Ld. CIT(A) failed to appreciate the fact that interest incurred on delayed remittance of TDS is compensatory in nature and hence allowable u/s 37(1) of the Act. 2.3. The Ld. CIT(A) ought to have appreciated that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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