Clubbing

The spouse of the assessee is getting allowance from the firm in terms of the partnership deed. The spouse of the assessee is a partner in the firm. She is getting allowance in the capacity of a partner and not in the capacity of an employee or consultant or any other service provider. She is providing service as a working partner of the firm. The income-tax law permits payment of salary and allowances to working partners subject to certain conditions including the terms of the partnership deed. When a partner of a firm is paid any interest, salary, bonus, commission or remuneration, the same shall be deemed as profits and gains of business or profession as provided in section 28(v). The law demands that any interest, salary, bonus, commission or remuneration by whatever name called due to or received by a partner of a firm, is to be assessed as profits and gains of business or profession.