Case Law Details
Aman Tandon Vs ACIT (ITAT Delhi)
In the given case, the first issue raised by the assessee is relates to the disallowance of business expenses from the remuneration earned by the assessee from the partnership firm assessed as business income u/s. 28 (v) of the IT Act, 1961.
ITAT find some force in the above arguments of the Ld. Counsel for the assessee. As mentioned earlier the revenue in the preceding and subsequent years has accepted such remuneration to the employees as an allowable expenditure from the remuneration from the partnership firms which has been taxed as business It is also an admitted fact that in case of another partner such salary paid to the employees was allowed by the Ld. CIT(A) as an expenditure from the remuneration of the partnership firm. Further the payment of salary of the two employees is not in dispute. We, therefore, find merit in the argument of the Ld. Counsel for the assessee that the CIT(A) cannot alter the nature of expenditure. The Hon’ble Supreme Court in the case of Ramlik Kothari (supra) has held that expenditure incurred by the partner for earning income from the partnership firm is an allowable expenditure. The various other decisions relied on by the Ld. Counsel for the assessee in the case law compilation also supports his case. Further the rule of consistency also is in favour of the assessee, since in the preceding and subsequent years such salary paid to employees were allowed as business expenditure from the salary income received from the partnership firm. No proceedings u/s. 147 or 263 have been initiated in subsequent years after the order of the CIT(A), rejecting the claim of the assessee. In view of the above discussion ITAT are of the considered opinion that the Ld. CIT(A) was not justified in upholding the disallowance made by the AO. Accordingly the order of the CIT(A) on this issue is set aside and the ground raised by the assessee on this issue is allowed.
The other issue raised by the assessee in the grounds of appeal relates to the order of the CIT(A) in confirming the addition of 5,25,000/- under the head “income from the house property”.
the AO during the course of assessment proceedings noted that the assessee has declared income from house property at Rs.4,24,270/- from House Property no-80 1, Central Park Gurgaon after deducting house tax and standard deduction u/s 24(a) of the IT Act. However, from the perusal of rent agreement the AO noted that initially assessee had rented the premises to Sinclair Knight Merz Consulting (India) Pvt. Ltd. on a monthly rent of Rs. 1,40,000/- with effect from March 2009 which was valid till 9th March 2011. However, the assessee has contended that the premises was vacated during the year and was again rented to Robbins Tunneling & Trenchless Technology (India) Pvt. Ltd. on a monthly rent of Rs.90,000/- with effect from 1st October 2010. Since, the assessee did not submit any documentary evidence in support of his claim that the premises was vacated by Sinclair Knight Merz consulting (India) Pvt.Ltd, the AO computed the income from house property
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Well summarized.
In view of this a CA partner in a CA firm can claim 44ADA (as 50% deduction is defendable in terms of these rulings)