Payment by firm to ex-partners or to spouses of deceased partners cannot be treated as application of money

ACIT Vs. M/s. Deloitte Haskins & Sells (ITAT Mumbai)

We find that the AO had held that payment made by the assessee to the ex partners or to the spouses/legal heirs of deceased partners was application of money, that the disputed amount was to be taxed in the hands of the assessee, that the payment to ex-partners was made in pursuance of the various clauses of the partnership deed, that during the assessment proceedings a copy of the deed was submitted, that he did not took cognizance of clauses 7 and 10 of the deed, that the deed clearly provided that the ex par

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