Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (12) TMI 346 - AT - Income TaxRemuneration paid to partners disallowed – Whether the additional income of ₹ 50,08,220/- is eligible for the purposes of computing the partners’ remuneration – Held that:- It forms a part of the profit for the purposes of computing the remuneration of the partners- In so far as the additional income declared which is not found to be assessable as ‘income from business’, the stand of the Revenue is that the same cannot qualify for the purposes of section 40(b) of the Act – relying upon Md. Serajuddin & Brothers vs. CIT [2012 (8) TMI 104 - CALCUTTA HIGH COURT] wherein it has been held that for the purpose of computation of allowable remuneration to partners, book-profit has to be ascertained not only from income of business alone but also income from other sources - Section 40(b)(v) read with Explanation cannot be separate method of accounting for ascertaining net profit and/or book-profit - the net profit as shown in the profit and loss account not the profit computed under the head profit and gains of business or profession – thus, the AO is directed to calculate the allowable remuneration by ascertaining not only income from business but also income from other sources. – Decided in favour of assessee. Additional income declared representing excess stock – Whether or not additional income surrendered during the course of survey is assessable as income from business or not - Held that:- There cannot be an absolute proposition that any income surrendered during the survey is a business income or vice versa - in the absence of the nature of source of cash being proved it was held not to be assessable as income from business - an amount contained in the excess stock declaration of ₹ 15,01,620/- can be said to be assessable as income from business - For balance of the amount of excess stock, assessee has not demonstrated on the basis of evidence, the source from where such investment has been made and therefore it cannot be assessed as income from business – Decided in favour of assessee.
|