Assessment of firm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 December 2012 Dear Experts, In one case, AO has disallowed some expenses of partnership firm. Firm distributed remuneration to partners as per section 40(b). Even partnership deed provides manner of distribution of remuneration as per section 40(b). Now, Profit has increased as expenses are disallowed. My question is, 'Can I compute revised remuneration as profit is increased & reduce tax liability of firm? can I do so by making application u/s 154?' Mistake apperant from record which I will claim is 'Wrong computation of Business income'. Can I do so? Please guide.

Amol S Joglekar

Amol S Joglekar (Expert)
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27 December 2012 No, that is not the INTENT of LAW.
Another point worth considering could be.... if you recast the remuneration at this stage..... the PARTNERS' returns may be a good bet for 271(1)(c)

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Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2012 Thank you sir for quick reply.
So, in your opinion there is no room for additional remuneration to partners out of amount which is disallowed by AO.

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