TMI Blog2021 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... the partnership deed it is clearly mentioned that no interest on capital or remuneration is payable to the partners. We find that the Hon'ble Gujarat High Court in Alidhara Taxspin Engineers (supra) held mere incorporation of interest on partners capital account and remuneration does not signify that the same is mandatory in nature. The case of the assessee is rather on the better footing, as the clause in the partnership deed clearly spelt out that no interest on capital of partners or remuneration is payable to the partners. We do not find any merit in the grounds of appeal raised by the revenue. The case law relied by Ld. CIT-DR is not helpful to the revenue after the decision of Hon'ble Gujarat High Court in Alidhara Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n without allowing the interest and remuneration to partners which was otherwise taxable in the hands of partners. 2. The assessee has tried to cover its intentions behind the provisions of section 40(b) of taking undue benefits of section 10AA by making reverse interpretation of the same which says that a firm is entitled for claim of remuneration and interest paid to partners only if the same is authorized in the Partnership Deed. 3. The income in the hands of the a firm was computed in terms of Sec 28 to 43D and Sec 40(b) in respect of allowance of interest and salary falls between these two provisions and therefore full effect has to be given to this provisions also. Hence, the action of the AO was in accordance of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies carefully. The Ld. CIT-DR for the revenue supported the order of the assessing officer and would submits that the assessee has not charged interest on partners capital and remuneration thereto to enhance the profit of eligible exempt income. The Ld. CIT-DR for the revenue relied on the decision of Tribunal in Meridian Impex (supra). 4. On the other hand the learned AR for the assessee supported the order of Ld. CIT(A) and would submits that the ground of appeal raised by the revenue is squarely covered by the decision of Jurisdictional high Court in Alidhara Taxspin Engineers ( Tax Appeal No. 265 of 2017 dated 02.05.2017) and various other decisions of the Tribunal, which are passed after considering the said decision of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clause in the partnership deed clearly spelt out that no interest on capital of partners or remuneration is payable to the partners. Therefore, we do not find any merit in the grounds of appeal raised by the revenue. The case law relied by Ld. CIT-DR is not helpful to the revenue after the decision of Hon'ble Gujarat High Court in Alidhara Taxspin Engineers (supra). 7. In the result the appeal filed by the revenue is dismissed. ITA 603/SRT/2018 by revenue for AY 2010-11 8. As recorded above the revenue has raised identical grounds of appeal as raised in appeal for A.Y. 2009-10, which we have dismissed, therefore, following the principle of consistency, the appeal for A.Y. 2010-11 is also dismissed with similar observat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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