CIT v Great City Manufacturing Co [ITA No: 461 of 2009 dtd 10.12.2012] – Allahabad High Court Background: The assessee is a partnership firm engaged in the business of manufacture and export/sale of brass art ware. The assessee filed its return of Income for AY 2005-06 on 31.10.2005 declaring a total income of Rs. 57,68,627. During the course of assessment proceeding the AO noticed that the assessee had paid remuneration to its partners to the tune of Rs. 39,31,965/- whereas it has paid total salary to its employees only Rs. 486918/-. The AO stated that the partnership deed does not specify the functions and duties in respect to working partners justifying the remuneration of Rs. 13,10,665/- to each of its partners when barely a total salary of Rs. 486918/- was paid to all its employee. The remuneration paid to working partners was highly excessive. On this point the Assessing Officer allowed the remuneration upto Rs. 4,00,000/- per annum to each of the partners.