TMI Blog2022 (9) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... deed was amended w.e.f. 01.01.2012 by the amended deed dated 12.01.2012 that means the partner Smt. Kanchan Devi became working partner from January, 2012 and for three months, she is entitled for remuneration. The entire details was available before CIT(A) i.e., partnership deed, the computation of book profit and allocation of remuneration to this working partner Smt. Kanchan Devi. Assessee has rightly allocated Rs.6 lakhs rather it is less because if we allocate the remuneration to working partner which comes for these three months. We are of the view that the assessee has rightly claimed the payment of remuneration to working partner Smt. Kanchan Devi in term of provisions of section 40(b) and CIT(A) as well as AO both erred in not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely Smt. Kanchan Devi to the extent of Rs.4.50 lakhs. The AO required the assessee to explain as to why the excess remuneration paid be not disallowed. The assessee explained but the AO was not convinced with the explanation and made addition. The CIT(A) also confirmed the action of the AO by stating that the basis of allocation of remuneration is not supported by any document and whether such document was executed before the close of the financial year is not clear. Therefore, he inferred that the remuneration fixed and paid to Smt. Kanchan Devi for an amount of Rs.6 lakhs is not correct as she became working partner only for and from January, 2012. Then the CIT(A) estimated the remuneration per month at Rs.50,000/- and allowed only Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be due on the last day of the Accounting year of the firm. iii] The partners shall be entitled to increase or decrease the above said remuneration from time to time as may be agreed upon by them. In term of the above, the assessee computed remuneration and paid remuneration to one of the partner i.e., Kanchan Devi as she was admitted as working partner from 01.01.2012 at Rs.6 lakhs. For this, the assessee computed the book profit as under:- BOOK PROFIT (Annexed) Rs.1,10,64,639.40 REMUNERATION AS PER FIRST RS.3,00,000 @90% Rs. 2,70,000 REMUNERATION AS PER BALANCE PROFIT 60% Rs. 61,53,383 TOTAL REMUNERATION PAYABLE Rs. 64,23,383 TOTAL PAYABLE PER PARTNER (1/3) Rs. 21,41,127.6666667 TOTAL PAI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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