Income Tax - Highlights / Catch Notes
Income Tax - Determination of remuneration paid to partner - working /...
Determination of remuneration paid to partner - working / retiring partner - the firm has incorporated the terms of section 40(b), providing for the maximum amount of remuneration payable to the working partners of a partnership firm with reference to it’s ‘book-profit’, as defined therein, in the partnership deed itself for quantifying the said remuneration. As the same is thus based on book-profit, the firm prepared two profit & loss accounts, i.e., for the period up to the date of retirement (P1), and thereafter (P2), computing the remuneration to the working partner separately for each period, i.e., for settling the accounts between the partners, even as it filed, as is required to by law one return of income for the entire year. - Revenue appeal dismissed - AT