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2009 (3) TMI 519 - HC - Income TaxBusiness Expenditure- The assessee is a partnership firm consisting of nine partners of which five are ladies. The Assessing Officer noticed that the assessee had paid salary to the partners treating them as working partner, although some of them resided in far away places and therefore he disallowed the salary paid by the assessee to these partners under section 40(b) of the Act. Commissioner (Appeals) held that the partner were working partners and allowed the claim. Held that- court did not interfere with the order in appeal in view of the finality of the assessments of the partner. The Assessing officer also disallowed 25 percent of payments under section 40A(2) but the Commissioner (Appeals) and Tribunal allowed it. Held that- that the entire payment had been made to various partners and relatives. The disallowance of 25 percent made by the Assessing Officer under section 40A(2)(a) of the Act was justified.
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