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Section 14A

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This query is : Resolved

CA PARAS BAFNA (Querist)
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05 December 2010 A person introduces capital in the firm from outside borrowings on which interest payable by him is Rs 60000/-.
He receives Rs 30000/- as Interest on Capital, 50000/ as Remuneration and 100000/ as Share in Profit(After Tax) from the Firm.

Can Section 14A be invoked by the ITO?

vinay v. kawdia

vinay v. kawdia (Expert)
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07 December 2010 Yes.

Please refer :- Decided by: ITAT, MUMBAI BENCHES `H’, In The case of: Dharmasingh M. Popat v. ACIT, Appeal No.: ITA No. 7534/Mum./2004, Decided on: January 6, 2009.
HELD: income charged in the hands of partnership firm can not be treated as being a non-exempt income in the hands of a partner of such firm and, therefore, provisions of section 14-A would be applicable in computing the total income of such partner in respect of his share in the profits of such firm.

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