No Tax on amount received by Partner on reduction in Profit Sharing Ratio

Anik Industries Ltd. Vs DCIT (ITAT Mumbai) During assessment proceedings, it transpired that the assessee was a partner of 30% in a partnership firm namely M/s Mahakosh Property Developers (in short ‘firm’). During the year, the assessee received a sum of Rs.400 Lacs on account of surrender of 5% share of profit from 30% to 25% and reduced the said income from its computation of income by submitting that the firm was reconstituted and right was created in favor of existing partners. The assessee, relied upon the decision of Hon’ble Madras High Court in A.K.Sharfuddin V/s CIT ...