CBDT Circular Circular No. 739 dated 25.3.1996 for section 40(b)(v), the partnership deed should specify the remuneration, is invalid

PrintPDF M/s Durga Dass Devki Nandan vs. ITO (HP High Court) - The CBDT circular can only be held to be valid if it is in terms of the main section. As held above, the Section 40(b)(v) only lays down that either the working partner should be paid an amount specified in the partnership deed or it should not exceed the amount laid down in the Section. In the present case the partners have been paid their remuneration/salary strictly in accordance with the terms of the partnership deed and this amount paid to the partners does not exceed the maximum permissible amount and therefore, the assessee is entitled to the deduction.