Salary to partners as per deed and Income Tax Act cannot be disallowed

Salary to the partner is being regulated by the provisions of section 40(b) of the Income Tax Act. It is to be paid in accordance with the provision stipulated in the deed which should be in commensurate with the provisions of section 40(b) of the Income Tax Act. On such salary payment, provisions of section 40 A(2) cannot be invoked. 1. Assessee is a partnership firm. At the relevant time, it was engaged in the business of trading of chemicals which are primarily used in textile process. It has filed its return of income on 21.9.2009 declaring total income at Rs.14,60,263/- . The case of the ...