TMI Blog2021 (8) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts of the assessee in relation to the property income from property dealing, amount to business income and it allows the set off of the business loss - We, therefore, direct the assessing officer to delete the disallowance of the set off of the business loss. Disallowance of salary paid to partners under section 40 (b) of the Act has to be worked out keeping in view the consequences of the deleting the disallowance of the set off of the business loss - HELD THAT:- We set aside the impugned order on this aspect, and remand issue to the file of the learned Assessing Officer to work out the maximum allowable salary to partners. - ITA No. 3512/Del/2018 - - - Dated:- 16-7-2021 - Prashant Maharishi, Member (A) And K. Narasimha Chary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Assessing Officer allowed the salary to partners to the tune of ₹ 1.5 Lacs, on the ground that in view of the fact that the disallowance of the set off of the business losses would result in the business loss of ₹ 16,74,747/- before allowing interest and salary to the partners against the business of the assessee firm. 3. Assessee preferred appeal before the Ld. CIT(A) and argued that in the case of PCIT vs. M/s. Kushi Ram and Sons it was held that the surrendered amount is from business income and therefore, set off of the business losses could be allowed out of it. Ld. CIT(A) did not accept the contention of the assessee and held that the surrendered amount is deemed income and does not fall under any of the head o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the learned Assessing Officer placed reliance on the decision of the Hon'ble Apex Court High Court in the case of Fakir Muhamed Haji Hasan vs. CIT 247 ITR 290 and the deletion of the Hon'ble Punjab and Haryana High Court in the case of M/s. Kim Pharma in ITA No. 106 of 2011 dated 27.04.2011. She further submitted that in Kushi Ram (supra) it was held that it is not necessary that the surrendered amount is from business income. She therefore submits that the orders of the authorities below are justified and the assessee cannot be allowed to set off the business losses out of the deemed income. 6. We have gone through the record in the light of the submissions made on either side. There is no dispute that from the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off. 8. We have also gone through the circular No. 11/2019 issued by the CBDT wherein it is clearly stated that the amendment inserting the words or set off of any loss is applicable with effect from 1/4/2017 and in view of the fact that there were conflicting views taken by the Assessing Officers in the assessment years prior to the assessment year 2017-18, keeping the legislative intent behind the amendment in section 115 BBE (2) while The Finance Act, 2016 to remove any ambiguity of interpretation, the Board was of the view that since the term are set off of any loss was specifically inserted only vide the Finance Act, 2016 w.e.f. 1/4/2017, an assessee is entitled to claim set off of loss against income determined under section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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