Payments made to retiring partners not allowable as it is application of firms income

RELEVANT PARAGRAPH 18. The question to be decided is whether the payment to such retiring partners have been made on capital account or the same is a charge on the income of the firm being diverted by overriding charge. Reading the terms of the agreement entered into between the parties on 30-03-2000, in continuation with the agreement entered into on 30-3-2001, it transpires that certain events were taken care of as certainty by the parties. The retirement of Mr. Philp, Mr. Merchant was a certainty as provided in clause 24(b) of the deed dated 30-3-2000. Special terms were agreed between the ...