This appeal filed by revenue arising out of order of CIT(A) dated 22-7-1998 for assessment year 1993-94. At outset, it has been informed that ground Nos. 1 and 2 relate to single issue and if therein issue is settled, then third ground becomes infractuous. 2. Ground Nos. 1 and 2 as raised by revenue read as follows:- '1. On facts and in circumstances of case and in law, CIT (Appeals) erred in deleting addition made by Assessing Officer on account of remuneration paid to partners, Shri. B.M. Shah and Shri S.G. Prabhu amounting to Rs. 85,085 and Rs. 28,361 respectively, who are representing their HUF's as Karta, as it is expressly not allowable under provisions of Explanation4 to sub-section (v ) of section 40(b) as they are not working partners in their individual capacity. 2. On facts and in circumstances of case, CIT(A) failed to appreciate that as per provisions of Explanation 4 to sub-section (v ) of section 40(b) which clearly mentions that 'working partner' means 'individual who is actively engaged in conducting affairs of business or profession of firm in which he is partner; whereas, in instant case, partners, Shri B.M. Shah and Shri S.G. Prabhu, are representing their HUF's as Karta as such, as Karta of HUF, they are not eligible to salary within provisions of section 40(b) of Income-tax Act, 1961.' We have heard parties and perused orders of authorities below i n light of case law cited. short issue is whether firm is entitled to claim deduction of expenditure of salary/remuneration paid to Karta; who has become partner representing their respective Hindu Undivided Family (HUF). I n this regard, observation of Assessing Officer (A.O.) was that Shri Subash Prabhu and Shri Balakrishna Shah have joined as Karta of their respective HUF and paid remuneration by firm. Assessing Officer has also mentioned that partnership deed was executed through which remuneration was authorized to Kartas of HUF. In his opinion, 'working partner' means individual actively engaged in conducting affairs of firm. Assessing Officer has disallowed remuneration on following reasons:- 'The remuneration authorised to partners in Partnership Deed is assessable under sections 28 to 44 i.e. business income as per Income-tax Act 1961. In short provisions of Income-tax Act are clear that income of remuneration is not assessable in hands of partners under section 16. It means for this payment no relation of employer or employee is to be established. remuneration as business income is to be assessed in hands of partners only. Income-tax Act itself has not supporting assessee's representative's interpretation. There is contractual relation amongst partners and Income-tax Law allows payment of Salary as per norms prescribed in section 40(b) to its partners, and Explanation 4 to section 40(b) of Income-tax Act 1961, strictly allows payment to individual'. 3. issue was carried before first appellate authority, who has discussed provisions of law and thereafter arrived at conclusion that two individuals who have received remuneration on behalf of their respective HUF's had admittedly looked after affairs of appellant firm. He has also mentioned that payment which was authorised through deed had also not exceeded limit. He has also commented that such expenditure or outgoing was otherwise allowable under section 37(1) of Income-tax Act while computing business income of firm. It was concluded by him that simply because person being partner in firm in capacity of HUF has no bar on him to render services to firm and firm provides suitable remuneration to him for services rendered, so expenditure was held as admissible business expenditure under section 37(1) of Income-tax Act. said disallowance was deleted, due to which, now revenue is aggrieved. 4. From side of revenue, learned D.R. Mr. P.R. More/ Mr. P.K. Kulkarni has argued that even after amendment in section 40(b), expenditure incurred in connection of salary is allowable only when paid to individual because terminology used in section is 'working partner'. working partner is person who is actively engaged in conducting affairs of business. HUF cannot be working person as entity of HUF is collective group of persons. Further, he has also argued that one has to examine clauses of partnership deed and ascertain whether provision is made for payment of salary to Karta on behalf of HUF. Even if it is so, further enquiry is required to ascertain practicability of said remuneration whether offered in hands of HUF or in hands of Karta in his individual capacity. This issue was considered as per old section by Hon'ble Delhi High Court in case of Sanghi Motors v. CIT [1982] 135 ITR 359, referred by Ld. D.R. 5. From side of respondent-assessee, it was stated at outset that amended provision have duly been considered by Tribunal and issue is now settled in favour of assessee. Decisions cited are as follows:- (1) ITA No. 381/PN/2001, order dated 16-7-2002, assessment year 1995- 96, in case of M/s. Tarachand Bhaichand Phade, Pandharpur, Pune Bench. (2) ITA Nos. 365, 366 and 367/PN/1999, order dated 25-7-2001, assessment years 1993-94, 1994-95 and 1995-96, in case of M/s. Tarachand Bhaichand Phade, Pandharpur, Pune Bench. (3) ITA No. 523/PN/98, order dated 26-11-2001, assessment year 1993-94, in case of M/s. N.R. Sheth & Co., Satara, Pune Bench. (4) ITA Nos. 1003 & 1004/PN/97, order dated 1-11-2000, assessment years 1994-95 & 1995-96 in case of M/s. Surajmal Laljee & Sons, Umbraj . Further, ld. A.R. has also mentioned that several decisions have clearly indicated that qua firm partner is in his individual capacity representing their respective HUF. It was also held that Karta, who is representing HUF in his personal capacity is responsible to look after affairs of firm. Due to this reason, payment of remuneration was nothing but payment to 'working partner', hence allowable under section 40(b) of Income-tax Act. Case laws cited are as follows:- (1) CIT v. Bagyalaxmi & Co. [1965] 55 ITR 660 (SC) (2) Dulichand Laxminarayan v. CIT [1956] 29 ITR 535 (SC) (3) CIT v. A.P. Matpadi & Bros. [1998] 230 ITR 160 (Kar.) (4) Rasik Lal & Co. v. CIT [1998] 229 ITR 458 (SC). 6. Heard rival submissions, perused orders of authorities below in light of precedents cited from side of both parties. This is case of registered firm who has paid remuneration to partners who are representing their respective HUF. It was recorded that both persons are Karta of their respective HUF and became partner of firm as Karta representing HUF's. There is no dispute about this fact that remuneration was paid which was duly authorized by properly executed partnership deed; as prescribed under amended provision of Act. amendment took place in section 40(b) of Income-tax Act and according to new substituted section in case of any firm assessable as such, certain amounts shall not be deducted for and from assessment year 1993-94 in computing income of any payment of remuneration to any partner who is working partner duly authorized and in accordance with terms of partnership if amount exceeds aggregate amount prescribed in section 40(b)(v ) of Income-tax Act. In other words, on careful reading of section 40(b) along with its explanations, it may, broadly speaking be concluded that any payment of remuneration to any partner, who is working partner as defined in section which is authorized by and is in accordance with terms of partnership deed and relates to any period falling after date of such partnership deed shall be allowed but should not exceed aggregate amount to be computed as prescribed in section 40(b) (v )(1) and (2). Aforementioned provision were on total departure from old provisions, according to which, in case of firm, any payment of remuneration made by firm to any partner was not allowable as deduction in computing income of firm; old section was intended to prevent siphoning off firm's income to partners in order to reduce tax liability in hands of firm. However, this position was changed and as per new section, upper limit has been prescribed for payment of salary or remuneration based upon book profit of firm. Due to this amended provision, taxpayers have modified their partnership deed and inserted clause for payment of remuneration to working partners of firm. In light of above history of amendments, we have examined issue in hand that whether remuneration paid to Karta who was representing HUF, is allowable as expenditure of firm because payment was not to individual but to Karta of HUF. In fact, this issue was very much under litigation even at time of old provision, and it was held that salary paid by firm to its partner who, as Karta represented HUF in firm i.e. in representative capacity, is nothing but payment to individual, hence in view of clear intendment contained in old section 40(b) it was disallowed. Hon'ble Court has observed in Rasik Lal & Co.'s case (supra) that firm is compendious way of describing individuals constituting true firm. HUF directly or indirectly cannot become partner of firm because firm is association of individuals. Under Hindu law, not all members of joint family but only such of its members, have in fact enter into partnership offered and become partners. Due to this reason, it was considered that in view of section 13 of Partnership Act, partner is not entitled to receive any remuneration for taking part in context of business. It was interpreted to mean that every partner is bound to attend diligently to business of firm. In light of specific provision of Partnership Act, it was held that even under such special circumstances when HUF is partner, any commission or remuneration paid by firm to its partner is held to be not permitted as deduction from business income of firm. If claim made by partner that he is representing HUF or any other body of persons, then position of law will not be any different as held by Apex Court. In one of precedent cited supra, observation of Court was that HUF is not and cannot be partner in partnership firm, so remuneration paid to partners cannot be claimed to be remuneration paid to HUF. Court has observed that assessment of firm have to be made strictly in accordance with provisions of section 40(b) and law has to be taken as it was. Since remuneration to partner was not admissible under old section 40(b), hence it was held that said clause expressly prohibits such deduction. aforesaid view was taken by several courts but by relying upon decisions, one in case of Dulichand Laxminarayan (supra) and another in Bagyalakshmi & Co.'s case (supra) view was expressed that firm is not 'person' and as such not entitled to enter into partnership with another firm or HUF or individual. courts have held that qua partnership, partner function in his personal capacity, however, qua third parties, he is responsible in his representative capacity. Due to abovesaid interpretation result was against assessee, however, now law has taken U-turn so ratio laid down in those precedents as on date supports claim of assessee. To make it more clear, ratio laid down was that qua firm partner is always individual may be Karta representing HUF. old section had prohibited deduction of salary to partner so those decisions were against assessee- firm, because in those years claim was in respect of payment to Karta of HUF alleged to be not individual partner, which was negated. Those very decisions now supports exact identical claim made by assessee-firm due to overturned position of law. old section 40(b) has now turned-turtle so earlier what was not allowable is now provided in statute as allowable. So following interpretation laid down by several courts, co-ordinate benches have unanimously held that as per amended section 40(b) though HUF is partner but only through individual, who functions in his personal capacity qua firm, hence, payment to such person has to be allowed as deduction as if paid to individual partner. Respectfully following above several precedents and view already taken by co-ordinate benches, we hereby affirm finding of ld. CIT(A) and dismiss grounds of revenue. 7. In result, revenue's appeal is dismissed. *** INCOME TAX OFFICER v. BHARAT ENTERPRISES