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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
Dated this the 21st day of January, 2013
PRESENT
THE HON’BLE MR JUSTICE D V SHYLENDRA KUMAR AND THE HON’BLE MR JUSTICE B SREENIVASE GOWDA
Income Tax Appeal No. 822 of 2007 BETWEEN:
THE COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE
C R BUILDING QUEENS ROAD BANGALORE.
THE INCOME-TAX OFFICER WARD – 5(4) C R BUILDING,
QUEENS ROAD BANGALORE.
… APPELLANTS
[By Sri K V Aravind, Adv.]
AND:
M/S ASHWINI HOSPITAL NO.1084, HOSPITAL ROAD YELAHANKA OLD TOWN BANGALORE.
… RESPONDENT
[By Sri N Manohar, Adv.]
THIS APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 08.06.2007 PASSED IN ITA NO. 832/BANG/2006, FOR THE
2 ASSESSMENT YEAR 2003-2004, PRAYING TO SET ASIDE THE SAID ORDER OF THE TRIBUNAL AND ETC.,
THIS APPEAL COMING ON FOR HEARING, THIS DAY, SHYLENDRA KUMAR J., DELIVERED THE FOLLOWING:
J U D G M E N T
This appeal by the revenue under Section 260A of the Income Tax Act, 1961 [for short, the Act], though had been admitted to examine the following substantial question of law, is listed for hearing: Whether the Tribunal was correct in holding that the remuneration paid to partners of Rs.7,20,000/- was not hit by Section 40(b)(v) of the Act as the partnership deed even though did not contemplate the actual remuneration to be paid to the partners, the same permitted fixation of the remuneration which would comply with the Board Circular No.739 dated 25.03.1996 which was applicable only to the initial years, when the said section was introduced and consequently the remuneration was allowable?
Sri K V Aravind, learned standing counsel for the appellant-revenue and Sri N Manohar, learned counsel for respondent-assessee submit that having regard to the valuation of the subject matter of this appeal, which is in
3 a sum of Rs 2.10 lakh and having regard to the board circular, the appeal, though, may be disposed of as not tenable, liberty may be reserved to the appellant-revenue for reviving the matter in the event of success of the revenue before the Supreme Court in SLP No 27468 of 2010 and connected matters, wherein a similar orders have been made subject matter.
In the light of this submission, this appeal is dismissed only on the ground of valuation and maintainability, but reserving liberty to the revenue to seek for revival of the appeal in the event of success in the special leave petition before the Supreme Court, as noticed above.
Sd/- JUDGE
Sd/- JUDGE *pjk