BHAGWAN THEATERS (FIRM),ALLAHABAD vs. INCOME TAX OFFICER WARD-1(5), ALLAHABAD

ITA 139/ALLD/2019Status: DisposedITAT Allahabad05 July 2021AY 2012-1311 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that remuneration paid to partners, if within the limits prescribed by Section 40(b)(v) and duly credited in their accounts, is allowable even if there are minor discrepancies in partner statements. However, advertisement expenses incurred by a firm that has let out its theatre are not considered wholly and exclusively for the purpose of its business.

What were the facts?

The assessee, a partnership firm, claimed remuneration paid to its partners. The Assessing Officer (AO) disallowed a portion of this remuneration based on discrepancies in partner statements and also disallowed advertisement expenses. The CIT(A) confirmed the disallowance of advertisement expenses but deleted the disallowance of partner remuneration for AY 2012-13.

What were the issues?

Whether disallowance of partner remuneration is justified when it complies with Section 40(b) and whether advertisement expenses are deductible for a firm that has leased out its theatre.

Which sections of the Income-tax Act were involved?

Section 40(b),Section 147,Section 143(3),Section 148,Section 139

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Income Tax Appellate Tribunal, ALLAHABAD BENCH ‘SMC’ ALLAHABAD

Before: SHRI.VIJAY PAL RAO

For Appellant: Shri K. K. Srivastava, Shri Sumit Agrawal, C.A
For Respondent: Shri A.K. Singh, CIT ( Sr. DR)
Hearing: 12.07.2021Pronounced: 15.07.2021

PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER:

These two appeals by the assessee are directed against two separate orders of CIT(A)- Allahabad, both dated 08.08.2019 for the A.Ys. 2012-13 & 2013-14 respectively.

2.

For the A.Y.2012-13, the assessee has raised the following grounds.- “1. Because the authorities below erred in law and on facts in dismissing the appellants grounds on the issue of juri iction.

2.

Because the appellants ground that the authorities below could not travel recorded was illegally and unjustifiably dismissed legal aspects as has been brought by the of hearing of Appeal.

3.

Because the Ld. CIT(A) unjustifiably disallowed part of the remunerat

The order continues below.

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