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TMI BlogSalary paid to partner ,disallowed to the firm as it exceeds the limit. the same wrongly taken as business income by partner in his returnX X X X Extracts X X X X X X X X Extracts X X X X ..... Sir , the firm where i am a partner was disallowed salary paid to me as they had loss and my salary exceeded the allowable limit. However i missed this information and claimed as salary in my return as business income and paid tax accordingly. This case is for a.y 2013-14. I did not file any revise return for this A.Y. I have filed a rectification petition for correction of excess business income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as there is no scope of revised return now. now my query is can I say that the salary received by me in excess over the prescribed limit is my drawings from the firm , Can the firm pass a reverse entry for excess salary paid in the current F.Y 2016-17. Please advice both accounting and taxation treatment. thanks - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Whether the partners insisted fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the refund of excessively paid salary to you to the firm? - Reply By sudhir shah - The Reply = Sir , the firm had shown the entire amount as remuneration but the same was limited to rs 150000 in the ITR as the firm has a loss. There is no question of refund of excessive salary as it is as per deed. - Reply By CA Surender Gupta - The Reply = Once partnership firm has paid the amount to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artner as per the partnership deed, where the question of passing reverse entry in the books of account arises? Whether the entries were incorrect or wrong? If the answer is no, merely because different treatment is to be given for the purpose of Income Tax, reversal of entry may not be necessary in the books of accounts. On the other side, even if the period for revising the return u/s 139 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax is over, you have further option to claim refund as per the provisions of Section 237 of the income tax. Please refer: Section 237 : Refunds Section 238 : Person entitled to claim refund in certain special cases Section 239 : Form of claim for refund and limitation - Reply By sudhir shah - The Reply = Sir I being t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he partner of the firm treated the remuneration received as business income and paid tax on the same. Also the firm paid tax on the remuneration disallowed. so the tax was paid twice. Now when i am claiming refund of same department is not allowing me to take the excess amount received as my drawings but taxing it as my other income. what should be my reply to this ? - Reply By CA Surender Gupta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - The Reply = I think the answer lies within the provision so of section 185 Section 185 : Assessment when section 184 not complied with The amount disallowed in the hands of firm shall be not be taxable in the hands of partner. Further, I believe that what is not allowed to be done directly, cannot be done indirectly. Therefore, you need to take up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter at appropriate forum or go for appellate remedy. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = I endorse the views of Shri Surendar Gupta. - Salary paid to partner ,disallowed to the firm as it exceeds the limit. the same wrongly taken as business income by partner in his return - Query Started By: - sudhir shah Dated:- 20-9-2016 Income Tax - Got 6 Replies - Income Tax - Discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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