A partnership firm had 2 partners. Profit sharing ratio is say 50:50. 1 partner retired on say December 31 and on the same day one more partner was admitted. The new profit sharing ratio is say 70:30. The firm had losses upto Dec of around 6 lakhs and Jan to March it had profits of around 75,000. So overall in the entire year it has incurred losses of around 5,75,000. So the newly admitted partner will get his share of profits only i.e. 22,500 (30% of 75000) and he will not bear the losses as the losses were incurred before his admission in the firm. Now, my question is whether the share of profits received by the newly admitted partner from the firm is taxable in his hands or exempt. The firm did not pay any tax during the year as it was a loss. Kindly clarify with any case law if possible.
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