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Payments made to retiring partners not allowable as it is application of firms income
Case Law Details
- Case Name
- S. B. Billimoria & Co. Vs. ACIT (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2002- 2003
- Courts
- ITAT Mumbai
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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 ag...
