20 December 2011
Facts:- A partner receives Rs 25 lacs of remuneration and Rs. 10 Lacs interest on capital from all firms in which he is a partner.
Analysis:- Such income is chargeable under the head business or profession by virtue of S 28(v) and expenditure incurred by the partner in earning such income is deductable.
My Questions:- 1. Whether such cases are covered by S 44AA & S 44AB? 2. If yes, then whether it is profession so as to attract the limit of Rs. 15 Lacs or is it a business so as to enjoy Rs. 60 Lacs limit of gross receipts? 3. If it is assumed that such cases are not covered under tax audit then can it be covered under 44AA for compulsory maintenance of books of A/cs or whether it is exempt from S 44AA too?
21 December 2011
All these provisions you are talking about are applicable to the firm from which the partner is drawing his salary and not to the partner himself.
21 December 2011
Ok but if that is the case then what will be the implication where a partner is claiming expenses against his income from firms for example interest on borrowed capital used for introduction as capital in a firm is admissible as deduction, and there are case laws supporting this. So if expenses are claimed on one hand and on the other accounts are not required to be maintained even though the enter expense exceeds the limit of S 44AA, want this be an anomolie
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