9911796707
TMI Blog2007 (6) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... for the respondent. 2. These two appeals are filed by the appellant/assessee against the common order of the Tribunal dated 12/10/2001 in ITA Nos. 985 and 986/Nag/96. The common question of law raised by the assessee in these appeals is: "Whether on the facts and in the circumstances of the case, in view of the specific terms of the partnership deed in case of the partnership firm the deduction u/s 80HH of the Income Tax Act, 1961 is to be allowed on Gross Total Income before deducting the interest and remuneration to partner forming part of the business income being share income?" 3. The assessment year involved herein are 1997-98 and 1994-95 respectively. 4. For the sake of convenience we set out the facts in Appeal No. 17 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the above contention he has relied upon the judgment of Gujarat High Court in the case of C.I.T. vs. Kedraj Agricultural Industries reported in [2002] 253 ITR 346. 9. Mr. Jaiswal, learned Counsel for the revenue, on the other hand while supporting the order of the Tribunal submitted that the issue raised by the assessee is no longer res-integra and is covered by several decisions of this Court including the decision in the case of Indian Rayon Corporation Ltd. vs. C.I.T. reported in [2003] 261 I.T.R. 98. 10. It is pertinent to note that prior to the assessment year 1993-94 the distribution of profits of the firm to the partners in the form of interest and remuneration was not allowable as business expenditure in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the assessee because what is held in that case is that the amount of interest and salary paid to the partners which is disallowed under Section 40(b) of the Act is to be included in the gross total profit. As stated earlier, in the present the amount of interest and salary is allowable under Section 40(b) as amended by Finance Act, 1992. It is pertinent to note that the decision of the Gujarat High Court in the above case related to assessment years 1977-78 to 1979-80 that is prior to the amendment of Section40(b) by Finance Act, 1992. Thus, the aforesaid decision has no application to the facts of the present case. Thus, in the light of the amended provisions of Section40(b) of the Act, the Tribunal was justified in holding t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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