High Court Takes Liberal View On Limits Of Partners' Remuneration u/s 40(b)(v)

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Sat, Aug 4, 2012 at 9:35 AM
Subject: Message from EGroup of SolapurCAs High Court Takes Liberal View On Limits Of Partners' Remuneration u/s 40(b)(v)
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

Md. Serajuddin & Brothers vs. CIT (Calcutta High Court)

For s. 40(b)(v) limits, P&L A/c profits (including non-business income) have to be taken & not only "profits & gains of business" as computed u/s 28 to 43D

 

S. 40(b)(v) permits a firm to claim deduction of remuneration paid to a working partner upto certain limits of the "book profit". The term "book profit" is defined in Explanation 3 to mean "the net profit, as shown in the profit and loss account for the relevant previous year, computed in the manner laid down in Chapter IV-D … ". The High Court had to consider whether the term "book profit" meant the profit as per the P&L A/c (which included non-business income) or the "Profits & gains of business as computed under Chapter IV-D". HELD by the High Court:

(Click Here To Read More)

Regards,

Editor,

itatonline.org

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