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TMI Blog2015 (11) TMI 1789X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/Ahd/2012 inter alia challenging the CIT(A)'s order affirming disallowance out of remuneration paid to working partners us 40(b)(v)(2) amounting to Rs. 2,36,874/-. Its second substantive ground challenges validity of reopening. This latter ground is snot pressed in the course of hearing. Assessee's latter appeal assails correctness of the above stated section 40(b)(v)(2) identical disallowance of Rs. 3,23,807/-. Both parties are in unison that facts and the issue involved are identical in the two impugned assessment years. We take up ITA 555/Ahd/2012 for Assessment Year 2006-07 as the 'lead' case accordingly. 3. The assessee-firm is a dealer of Hero Honda motor cycles and service work. It filed its return on 31/12/2006 admitting income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only of motor cycle trading. And any activity related or ancillary threats in the line of main business was part and parcel of business income to be assessed as such. It further highlighted its capital, bank FD limit & current liability figures against fixed assets, current assets including stock in hand and claimed remaining balance as business investment because of surplus funds to be invested in order to avoid the same lying idle. A further clarification also came that these surplus funds fetched FD interest of Rs. 4,45,190/-. It also claimed to have taken an overdraft thereupon paying interest of Rs. 3,80,895/-. The assessee accordingly justified its action in treating the above stated interest sum as business income as well as its cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as well partner's remuneration. A co-ordinate bench of the tribunal in Akshar Associates vs. ACIT ITA 2583/Ahd/2011 decided on 15/09/2015 deleted identical disallowance by following hon'ble jurisdictional high court's decision CIT vs. JJ Industries (2013) 358 ITR 531 holding that for the purpose of ascertaining ceiling on the basis of book profits, the profit shall be that stated in P & L account. We draw support therefrom and conclude that assessee's income cannot be notionally excluded for the purpose of determining allowable deduction of partner's remuneration u/s. 40(b). The Revenue fails to point out any distinction on facts or law. We accordingly accept assessee's former ground on merits & delete the impugned section 40(b)(v)(2) dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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