ACIT Vs. M/s. Deloitte Haskins & Sells (ITAT Mumbai)
We find that the AO had held that payment made by the assessee to the ex partners or to the spouses/legal heirs of deceased partners was application of money, that the disputed amount was to be taxed in the hands of the assessee, that the payment to ex-partners was made in pursuance of the various clauses of the partnership deed, that during the assessment proceedings a copy of the deed was submitted, that he did not took cognizance of clauses 7 and 10 of the deed, that the deed clearly provided that the ex partners or the spouses of deceased partners would be paid part of the income of the assessee for the services rendered by them, that the FAA had taken note of the relevant clauses of the partnership deed,that he followed the judgments of the Hon’ble jurisdictional High Court delivered in the case of C C Choksi (ITA 193 of 2008, dated 25.07.2008), that in that matter the Hon’ble Court had, in the identical situation,held that the payment made to ex-partners or to the spouses of the deceased partners was not application of money, that the FAA had following the judgments had held that it was a case of diversion of income by an overriding title. In our opinion, the order of the FAA does not suffer from any legal or factual infirmity. So, confirming the same, we decide the effective ground of appeal against the AO.
