2010 (9) TMI 986

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..... the CIT(A) Kolhapur, dated 27.02.2009. The grounds read as under. 1) The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in not accepting the fact that interest income of Rs.1,56,65,189/- forms part of books profit for calculating remuneration to working partners U/s.40(b). The learned Commissioner of Income Tax (Appeals) did not accept the Rajkot ITAT Decision i .....

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..... ecisions of various Benches of the Tribunal. Ld counsel for the assessee relied on the Rajkot Bench decision of the ITAT in the case of ACIT Vs. Sheth Brothers and read out the conclusion portion of the order which is as under. Whole income embedded in the net profit as appearing in the P L a/c of the assessee-firm is to be taken into consideration for allowing deduction of remuneration paid .....

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..... It is obvious that the interest income of Rs.1,56,65,189/- is not to be excluded from the net profit declared by the assessee for computing book profit for the purpose of determining the allowable deduction of remuneration payable to the partners under s. 40(b). Thus, the grounds raised by the assessee should be allowed in its favour. 5. In the result, appeal of the assessee is allowed. Ord .....

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