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2015 (12) TMI 123 - AT - Income TaxDisallowance u/s 40(b) - remuneration paid to partners - AO held that interest so earned by the assessee can only be taxed as "income from other sources" - CIT(A) held that interest income is to be excluded from computation of permissible remuneration of partners - Held that:- The issue in appeal is now squarely covered by the judgement of Hon'ble jurisdictional High Court in the case of CIT vs. J J Industries (2013 (7) TMI 577 - GUJARAT HIGH COURT) wherein Their Lordships have upheld the Tribunal's stand to the effect that for the purpose of ascertaining ceiling on the basis of book profit, the profit shall be in the profit and loss account. The interest income, therefore, cannot notionally be excluded for the purpose of determining the allowable deduction of remuneration paid to the partners under Section 40b of the Act. As in the present case, in this case also interest was assessed as business income, and yet, for the purpose of computing admissible deduction under section 40(b), a different path was followed - Decided in favour of assessee.
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