TMI Blog2011 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax, Shimla vs. M/s Anil Hardware Store, Manali 2009 -TMI - 34559 The Section 40(b)(v) only lays down that either the working partner should be paid an amount specified in the partnership deed or it should not exceed the amount laid down in the Section. In the present case the partners have been paid their remuneration/salary strictly in accordance with the terms of the partnership deed and this amount paid to the partners does not exceed the maximum permissible amount and therefore, the assessee is entitled to the deduction. Accordingly it was held that appeal is allowed - ITA No. 4 of 2005 - - - Dated:- 11-3-2011 - The Hon ble Mr.Justice Deepak Gupta, J. The Hon ble Mr. Justice Sanjay Karol, J. For the appellant: Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head Profits and gains of business or profession , - (a) xxxxxx xxxxxx xxxxxx (b) in the case of any firm assessable as such, - (i) xxxxx xxxxxx xxxxxxx (ii) xxxxx xxxxxx xxxxxxx (iii) xxxxx xxxxxx xxxxxxx (iv) xxxxx xxxxxx xxxxxxx (v) any payment of remuneration to any partner who is a working partner, which is authorized by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified the amount of remuneration payable to each individual working partner or lays down the manner of quantifying such remuneration, the benefit of Section 40(b)(v) would not be available to the assessee Firm. 5. The relevant portion of the partnership deed reads as follows:- That both the partners above mentioned shall be the working partners within the meaning of Section 40(b) of the Income-tax Act to be actively engaged in looking after the affairs of the business of the firm diligently and honestly and each of them will be paid a monthly salary as per the income-tax provisions and which can be revised from time to time in the best interest of the partnership. 6. The Assessing Officer was of the opinion that the partnership deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case when the partnership deed provides that the remuneration will be as per the provisions of the Income-tax Act, it clearly means that the remuneration payable to the partners shall be quantified as per the provisions of the Act and shall not exceed the maximum remuneration provided. In the present case, it is not disputed that the partners were paid remuneration which was less than the maximum provided by the Income-tax Act. None of the authorities have doubted the payment of remuneration and in fact account books of the assessee firm have been accepted to be correct. Therefore, nobody has doubted the payment of remuneration to the partners. 8. It has been urged by Shri Vinay Kuthiala, learned counsel for the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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