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TMI Blog2017 (4) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the book profit for the allowability of remuneration to partners? - Held that:- The book profit as shown in the Profit and Loss account has to be computed in the manner laid down in Chapter IV-D. Therefore, in our considered opinion, both the lower authorities have erred in setting off brought forward losses first in computing the book profit for the allowability of remuneration to partners. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee contends that the ld. CIT(A) erred in holding that brought forward business loss is first to be taken into consideration for the purpose of computing book profit u/s. 40(b) of the Act. 4. While scrutinizing the return of income for the year under consideration, the A.O. noticed that the firm has claimed remuneration to partners at ₹ 7,73,486/-. The A.O. was of the firm belief that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss. 7. This contention of the assessee did not find any favour with the A.O. who was of the opinion that Section 32(2) is governed by section 72(2) of the Act. Therefore, to determine book profit for the purpose of remuneration paid to partners' effect of section 72(2) should be given first before giving effect to the unabsorbed depreciation u/s. 32(2) of the Act. The A.O. accordingly re-computed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own in Chapter IV-D as increased by the aggregate amount of remuneration paid or payable to all the partners of the firm if such amount has been deducted while computing the net profit" Only from the business income of the firm." 11. A perusal of the above clearly shows that the book profit as shown in the Profit and Loss account has to be computed in the manner laid down in Chapter IV-D. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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