Court rules in favor of assessee on salary disallowance to partners' Hindu undivided family

The High Court of Karnataka ruled in favor of the assessee regarding the disallowance of salary paid to partners representing their Hindu undivided family under section 40(b). The decision aligned with a previous Division Bench judgment and answered a common question referred by the Income-tax Appellate Tribunal in favor of the assessee and against the Revenue.

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The High Court of Karnataka ruled in favor of the assessee in a case involving the disallowance of salary paid to partners representing their Hindu undivided family under section 40(b). The decision was based on a previous Division Bench judgment in CIT v. Mangalore Ganesh Beedi Works [1992] 193 ITR 77 (Kar). The common question referred by the Income-tax Appellate Tribunal was answered in favor of the assessee and against the Revenue.

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