TMI Blog2004 (12) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in deleting the addition of Rs. 1,45,007 made by the AO on account of commission paid to the partner." 3.1. The assessee-firm is partnership firm constituted by two partners, namely, Shri Prabh Dayal Dhiman and M/s Dhiman System (India) Ltd., represented by Miss Nishi Walia, director. The AO noticed that commission of Rs. 1,45,007 had been paid to M/s Dhiman System (India) Ltd. as per p. 3, para 6 of the audit report. The AO pointed out that there was no provision in the partnership deed regarding this commission payment to the partners. Therefore, this amount was not allowable as deduction to the assessee. The AO did not accept the explanation of the assessee that a reference was made in the audit report in view of the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved that it was a discount given to the partners on sale and as such the provisions as were made applicable by the AO for making the disallowance are not applicable. The CIT(A) has accordingly deleted the addition. 4. The learned Departmental Representative submitted that commission, as is mentioned in s. 40(b), to the partners is to be authorised by the partnership deed and since in this case there was no provision in the partnership deed, therefore, the AO was justified in making the disallowance of the amount in question. On the other hand, the learned counsel for the assessee reiterated the submissions as made before the authorities below and submitted that since discount is not covered by the definition of salary or commission to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... introduced aforesaid capital on withdrawals made on different dates. The partners also made confirmatory letter which was filed before the AO. The partner is stated to be one of the asses sees with the same AO, but the AO was not inclined to accept the plea of the assessee and made the addition of the cash credits being the amount deposited by one of the partners in his capital account. The AO accordingly made the addition under s. 68 of the IT Act. The CIT(A) deleted the addition considering the consistent view of the Tribunal, Amritsar Bench, in which it was held that cash credit in the name of partners be considered in the case of the partners. 8. The learned Departmental Representative conceded the point before us that since the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f travelling expenses." 10. The AO noticed that the assessee has claimed travelling allowance of Rs. 1,12,641 as against traveling expenses of Rs. 19,430 in the last year. The AO also noticed that the travelling expenses included Rs. 98,395 which pertained to foreign travel of Shri P.D. Dhiman, partner, to U.K. and Germany. The AO after discussion came to the conclusion that the tour could not be considered as having been undertaken for the purposes of business and, therefore, the expenditure could not be allowed to the assessee. The AO accordingly disallowed Rs. 98,395. It was submitted before the CIT(A) that it was not necessary that foreign travelling expenses should be allowed only if export sale was made during the year under assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the decision of the Hon'ble Calcutta High Court in the matter of Woodcraft Products Ltd., we are of the view that it was not necessary for the assessee to establish that the assessee has actually got business while one of the partners was on tour. Hon'ble Calcutta High Court has taken this view in the matter of Woodcraft Products Ltd. The assessee from p. 26, onwards in the paper book, filed copies of the letters, which clearly show that the partner of the assessee-firm was on tour abroad in connection with the business of the assessee. Merely because some business could not be transacted at that time is not sufficient to disallow the travelling expenses. In view of the above, we do not find any justification to interfere in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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