Case Law Details
The only dispute by the Revenue is that the amount of remuneration has not been quantified in the partnership deed. It is mentioned in clause 8 of the partnership deed that remuneration will be payable as per norms fixed by the relevant provisions of the Income-tax Act. Thus the quantification of the remuneration is apparent from the clause 8 of the partnership deed.
The requirement in law is that remuneration should have been authorized and the amount of remuneration shall not exceed the amount as mentioned in sub-clause (v) of Section 40 (b) of the Act. The relevant provisions has used the word ‘authorised’ and not the word used ‘quantify’. The ITAT Pune Bench in the case of ACIT Vs. Suman Construction 43 SOT 495 held that remuneration is to be deducted in case partnership deed authorizes the payment of salary. We have also considered the decisions which have been mentioned by the ld. CIT (A) in his order. We, therefore, feel that the ld. CIT (A) was justified in allowing the remuneration payable to the partners.
HIGH COURT OF RAJASTHAN AT JAIPUR
D.B. Income Tax Appeal No.275/2010
Commissioner of Income Tax
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