TMI Blog2021 (10) TMI 1247X X X X Extracts X X X X X X X X Extracts X X X X ..... ges from the running account bill of the contractor. No infirmity in the decision of the Ld. CIT(A) holding that testing charges was made by the Government and the assessee has only reimbursed the expenses through the mode of deduction made by the Government out of running bills of contract. Therefore, we do not find any merit in the ground of appeal of the Revenue and the same stand dismissed. Addition u/s 40(b) - remuneration to partner on the ground that remuneration of partner was not allowable on the amount of interest received on Fixed Deposit/SSNL Bonds which was treated as income from other sources -CIT(A) has allowed the appeal of the assessee - HELD THAT:- The assessee has claimed that interest on Fixed Deposit, interest on S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the assessee has neither at the time of proceedings u/s. 263 of the Act not at the time of proceedings u/s. 143(3) r.w.s. 263 of the Act has produced any material evidences regarding its claim that TDS at specified rate was deducted from the running bills by the contractee with respect to the testing charges. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in deleting the disallowance made on account of remuneration to partners, without appreciating the fact that the AO has rightly made such disallowance as the assessee in his profit and loss account has shown the interest income separately under the head indirect income. 3. The appellant craves leave to add to, amend or alter the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after following the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. J.J. Industries (2013) 35 taxmann.com 103 (Guj.) allowed the appeal of the assessee holding that interest income generated out of surplus fund invested in the Fixed Deposit was a part of the business income. 4. Heard both the parties, perused the relevant material available on record. 5. The AO has made disallowance of ₹ 12,03,690/- under Section 40(a)(ia) being the amount of expenses claimed under the head testing charges on the reason that the assessee has not deducted tax on such payment in accordance with the provision of Section 194C of the Act. The Ld. CIT(A) in his finding held that the assessee has not awarded any contract to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on the amount of interest received on Fixed Deposit/SSNL Bonds which was treated as income from other sources. The Ld. CIT(A) has allowed the appeal of the assessee. 7. Heard both the sides and perused the material on record. The assessee has claimed that interest on Fixed Deposit, interest on SSNL Fixed Deposit and interest on SSNL Bonds was made out of surplus funds available with the assessee and the interest income was part of the business income. Therefore, the same was correctly included for calculating remuneration of the partners. The assessee has also placed a copy of decision of the Jurisdictional High Court in the case of CIT vs. J.J. Industries (Supra) wherein it is held that interest from Fixed Deposit on spare funds can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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