Deduction allowable for Salary / interest to partners in computing undisclosed profit

ACIT Vs M/s. Balakrishna & Co. & Vice-Versa (ITAT Ranchi) Salary and interest, which is given to the partners in terms of the partnership deed, the tax liability of the said amount shifts upon the partners and cannot be taken as tax liability of the firm. The applicability of section 28(v) cannot be excluded in the matter of best judgement assessment in respect of an assessee firm. It was the specific case of the assessee that the partners were working partners and they were entitled to salary and interest, as per terms of the deed in accordance with section 40(b). Since as per sectio...