Share of profit, as per LLP agreement, exemption u/s 10(2A) available

JCIT(OSD) Vs Sri Aditya Kumar Singhania (ITAT Kolkata)

Facts-

The assessee is an individual and the source of income is from salary and share of profit from a Limited Liability Partnership (LLP). Return for Assessment was filed declaring income of Rs.52,92,490/- in which the assessee claimed exemption u/s 10(2A) of the Act for the share of profit of Rs.2,04,30,723/- from Adiman Finance Consultants Ltd. LLP.

Cases selected for scrutiny through CASS followed by the issuance of notice u/s 143(2) & 142(1) of the Act. The AO observed that if the total fixed and capital contribution was considered the assessee’s contribution was only 2.78% and that of Enam Shares & Securities Pvt. Ltd. at 97.22% and held that the assessee was only eligible to receive 2.78% of the total profit Rs.5,97,867/-. The balance income of Rs.1,98,32,856/- was disallowed and denied the benefit of exemption u/s 10(2A) of the Act. Income assessed at Rs. 2,51,27,510/-

Conclusion-

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