No Tax on amount received by Partner on reduction in Profit Sharing Ratio

Anik Industries Ltd. Vs DCIT (ITAT Mumbai)

During assessment proceedings, it transpired that the assessee was a partner of 30% in a partnership firm namely M/s Mahakosh Property Developers (in short ‘firm’). During the year, the assessee received a sum of Rs.400 Lacs on account of surrender of 5% share of profit from 30% to 25% and reduced the said income from its computation of income by submitting that the firm was reconstituted and right was created in favor of existing partners.

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