TMI Blog2015 (5) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... where the eligible assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of Section 40 of the Act. In the instant case, the Assessing Officer has estimated the income @8% of the total turnover of the assessee but he has not allowed the salary and interest paid to the partners, though the AO was required to allow the same even as per the provisions of Section 44AD of the Act. In the light of the these facts, we find force in the contention of the ld. AR of the assessee, therefore, we direct the AO to allow deduction on salary paid to working partners and interest paid to them on their capital from the es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by upholding the action of the Ld. Assessing Officer for not allowing depreciation from the income so estimated which not accordance with the well settled principle of law. 2. The assessee has also moved an additional ground that the Assessing Officer erred in law as well as in fact by not allowing interest on capital paid to partners and the remuneration paid to working partners from the income estimated @8% of turnover which should have been allowed as per the provisions of law. 3. During the course of hearing, ld. Counsel for the assessee has submitted that the assessment was framed u/s.144 of the Act and the books of accounts were rejected by the AO and estimated the net profit @8% of the gross turnover. Against which the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is more than ₹ 1 crore, therefore, provisions of Section 44AD cannot be strictly applied but inference can be drawn from this provision. Even the proviso to Section 44AD says that where the eligible assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of Section 40 of the Act. In the instant case, the Assessing Officer has estimated the income @8% of the total turnover of the assessee but he has not allowed the salary and interest paid to the partners, though the AO was required to allow the same even as per the provisions of Section 44AD of the Act. In the light of the these facts, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
