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2015 (11) TMI 1789 - AT - Income TaxDisallowance of remuneration paid to working partners us 40(b)(v)(2) - Both the authorities below have deducted the same from book profits as well as remuneration to partners on the ground that the same is not business income resulting in the impugned section 40(b)(v)(2) disallowance - HELD THAT:- There is no quarrel that assessee’s interest income has arisen from parking of surplus funds. AO treated this interest sum as business income in regular assessment framed on 21/07/2008. He has nowhere disturbed this crucial view and merely excludes the same from net profits in computing book profits as well partner’s remuneration. A co-ordinate bench of the tribunal in Akshar Associates vs. ACIT [2015 (12) TMI 123 - ITAT AHMEDABAD] deleted identical disallowance by following hon’ble jurisdictional high court’s decision CIT vs. JJ Industries [2013 (7) TMI 577 - GUJARAT HIGH COURT] holding that for the purpose of ascertaining ceiling on the basis of book profits, the profit shall be that stated in P & L account. We draw support therefrom and conclude that assessee’s income cannot be notionally excluded for the purpose of determining allowable deduction of partner’s remuneration u/s. 40(b) - delete the impugned section 40(b)(v)(2) disallowance - Decided in favour of assessee.
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