9911796707
TMI Blog2011 (8) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... ad shown sundry creditors and other liabilities to the tune of ₹ 74,96,201/- in the balance sheet which could not be accepted as assessee was following cash method of accounting. The AO further noted that similar dispute had arisen in assessment year 2001-02 in which the Tribunal had upheld the additions being increase in sundry creditors during the year in respect of certain items. He, therefore, computed the difference in terms of such items based on order of Tribunal in assessment year 2001-02, which was as under:- Particulars Bal. as at 31.3.05 Add to 31.3.06 Payments/W. back to 31.3.06 Bal. as on 31.3.06 Net figures of items for A.Y. 06-07 as per the order of ITAT confirmed in A.Y. 01-02 Unpaid cheques 17500 15088 Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tners or their spouses on their death was not for rendering any professional services for the firm and, therefore, such expenses could be allowed as deduction against the professional fees of the assessee firm. The AO also observed that the income by way of professional fees otherwise had reached the assessee firm and therefore, payment made by it to the ex-partners and their spouses were only application of income and could not be allowed as deduction by way of overriding title. The AO therefore, disallowed the claim and added the same to the total income. In appeal the CIT(A) following the decision taken in assessment years 2003-04 and 2004-05 confirmed the addition made by the AO, aggrieved by which the assessee is in appeal before the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artnership deed created overriding title in favour of these persons on certain percentage of receipts irrespective of the fact whether there was profit or not. The Tribunal observed that the case of the assessee was covered by the decision of the Tribunal in case of C.C. Chokshi & Co. in ITA No.492 to 495/M/2003 in which a similar claim had been allowed. The Tribunal after detailed discussion and after referring to the judgment of Hon'ble Supreme Court in case of CIT vs. Sitaldas Tirathdas (41 ITR 367) and the judgment of Hon'ble Supreme Court in case of Prince Khandelrao Gaikwar vs. CIT (16 ITR 294) and several other judgments held that it was a case of diversion of income and not application of Income. The facts in this year are identical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) set aside the order of CIT(A) and allow the claim of the assessee. 4. The third dispute is regarding disallowance of ₹ 5.00 lacs being payment made to Mr. E.A. Kshirsagar, a retired employee. The AO noted on detailed examination of expenses that the sum of ₹ 5.00 lacs being payment to Shri Kshirsagar a retired employee had been included under the head "payment to retried person or widows of exITA partner". The assessee had claimed deduction under section 37(1). The claim had been disallowed by the AO. The CIT(A) noted that the assessee had provided copy of some inter-office correspondence dated 13.5.2004 signed by Shri A.K. Mahindra and stating that Mr. Kshirsagar would be entitled to pension of ₹ 4.00 lacs w.e.f. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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