TMI Blog2022 (8) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... ise, in our considered opinion, is unreasonable. The question of disallowance by the Assessing Officer arises only in the event of claim for allowance by the firm. When there was no claim made by the assessee firm u/s. 40B, the question of disallowance does not arise. Therefore we are of the considered opinion that the matter requires a remission to the file of the Assessing Officer to decide the issue on hand with reference to the assessment record of the assessee firm in accordance with law as enunciated by us after affording a reasonable opportunity of being heard to the assessee firm. Thus, the grounds raised by the assessee stand partly allowed for statistical purposes. - ITA No. 1886/PUN/2018 - - - Dated:- 22-7-2022 - SHRI INTU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emuneration of Rs. 3,00,000/-. While doing so, the Assessing Officer rejected the contention of the appellant that in view of losses incurred by the partnership firm and in the absence of business income in the hands of the partnership firm, the question of payment of interest on capital contribution made by the partnership firm does not arise. Similarly, as regards to the Remuneration received from the partnership firm, the Assessing Officer brought to tax sum of Rs. 3,00,000/-. 4. Being aggrieved by the order of assessment, an appeal was filed before the Ld. CIT(A) who vide impugned order confirmed the order of the Assessing Officer. 5. Being aggrieved by the order of the Ld. CIT(A), the appellant is in appeal before us in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the payment of interest on capital contribution made by the appellant to the firm is in contravention of the provisions of section 40B of the Act. The interest on capital contribution made by partner of the firm is charge against the profits of the firm and is taxable as business income in the hands of the partnership firm under the provisions section 28(v) of the Act. The proviso inserted to section 28(v) carves out an exception to the effect that where any interest, salary, bonus, commission or remuneration, by whatever name called had not been allowed, as deduction under the provisions of section 40B in the hands of the firm, the amount of income chargeable under section 28(v) shall be adjusted to the amount not so allowed as deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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