THE COMMISSIONER OF INCOME TAX vs. M/S DEVANAND AUTOMOBILES

I.T.A.No.180/2007 - 1 - IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT GULBARGA DATED THIS THE 23RD DAY OF JANUARY 2013 PRESENT THE HON’BLE MR. JUSTICE N.KUMAR AND THE HON’BLE MR. JUSTICE H.G.RAMESH I.T.A. No.180/2007 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX GULBARGA 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1 GULBARGA ... APPELLANTS (BY SRI AMEET KUMAR DESHPANDE, ADV.) AND: M/S. DEVANAND AUTOMOBILES (BIJAPUR) HEAD OFFICE, GULBARGA ...RESPONDENT (SEVED & UNREPRESENTED)) THIS APPEAL IS FILED U/S 260-A OF I.T ACT, 1961 ARISING OUT OF ORDER DATED: 11.08.2006 PASSED IN ITA 1652/BANG/2005 FOR THE ASSESSMENT YEAR 2002-2003, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND ETC. THIS APPEAL COMING ON FOR HEARING THIS DAY N.KUMAR J., DELIVERED THE FOLLOWING:

I.T.A.No.180/2007 - 2 - J U D G M E N T The revenue has preferred this appeal challenging the order passed by the Tribunal which has upheld the order of the Appellate Authority granting deduction to the amount paid towards a working partner. In fact, this question arose for consideration before this Court in the case of the Commissioner of Income Tax & Another vs. M/s.Devanand Automobiles in ITA No.389/2007 and other connected matters where after reviewing the entire case law it was held that a remuneration paid to the individual partner who was admittedly a working partner, who was representing HUF in the partnership firm, is deductible. The word “individual” used in Explanation 4 includes that, individual who may be a karta or a member of the HUF who is representing HUF in the partnership firm. If that individual satisfy the requirement of a working partner then the remuneration paid to such working partner is deductible. In that view of the matter, there is no merit in this appeal. The

I.T.A.No.180/2007 - 3 - substantial questions of law are answered in favour of the assessee and against the revenue. Appeal dismissed. Sd/- JUDGE Sd/- JUDGE hkh.