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TMI Blog2003 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Amendment Act?" - The remuneration paid to the individual partners who are working partners is not to be disallowed on the sole ground that such partners were nominees of their Hindu undivided families. Even as the Hindu undivided family cannot claim that remuneration paid to the partners representing it, is remuneration paid to the Hindu undivided family, so also the Assessing Officer cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amendment Act?" The assessment year is 1994-95. Explanation 4 in section 40(b) of the Act reads thus: "For the, purposes of this clause, 'working partner' means an individual who is actively engaged in conducting the affairs of the business or profession of the firm of which he is a partner." The assessee is a firm which had paid remuneration to its working partners. The payments so made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivided family with which the partnership is not concerned". After referring to section 13 of the Partnership Act which permits a special contract for payment of remuneration to the partners, the court observed: "Section 40(b) of the Income-tax Act, 1961, will apply, even when there is such a special contract. Any commission paid by a firm to its partner will not be permitted as deduction from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artners is not to be disallowed on the sole ground that such partners were nominees of their Hindu undivided families. Even as the Hindu undivided family cannot claim that remuneration paid to the partners representing it, is remuneration paid to the Hindu undivided family, so also the Assessing Officer cannot regard to the remuneration paid to such partner, who is also a working partner, as remun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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