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Professional Fees to Partners

This query is : Resolved 
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(Querist)
17 December 2010 Dear All,

Is it admissible to pay professional fees to the partners of a firm and claim a deduction from profit.

WIll the professional fees paid considered as salary for section 40.
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Manmohan ACA, CS

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Manmohan ACA, CS (Expert)
18 December 2010 it will be treated as remuneration. partner is expected to provide his full expertise to business and shall not be remunerated for any excess service provided.
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ATUL U ANAVEKAR

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ATUL U ANAVEKAR (Querist)
18 December 2010 Thank you Manmohan.

Would be grateful if you could provide me with some case law on the same.
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HUZAIFA HUSSAIN

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HUZAIFA HUSSAIN (Expert)
18 December 2010 DEAR ATUL

PARTNER CAN BE PAID EXTRA FEES IF HE APPLIES HIS SKILL WHICH OTHER PARTNERS ARE INCAPACITY TO PROVIDE. SUCH INCOME CAN BE CONSULTANCY CHARGES FOR HIS EXTRA SKILL AND NOT REMUNERATION.
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