Case Law Details
Contention of the revenue
1. The CIT(A) has erred in law and on facts in considering the share of profit of Rs.47.48 crores as exempt u/s 10(2A) in the hands of the assessee despite the fact that the total income of the said firm namely M/s Parashar was Rs.Nil after claiming deduction u/s 80IB.
2. The CIT(A) has not appreciated the fact that the Circular No.636 dated 03.1992 was meant to prevent occurrence to double taxation. In this case, the income is not taxable in the hands of the firm and hence there is no question of double taxation while taxing the same in the hands of the partner (assessee).
Held by ITAT
CBDT itself has accepted the proposition that the share income from the firm received by the partners is exempt u/s 10(2A) of the Act and under no circumstances can be taxed in the hands of the partners. In view thereof, the order of the CIT(A) is upheld and the appeal of the Revenue is accordingly dismissed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.