Section 10(2A) exemption for LLP share of partnership profits upheld where firm had already suffered tax.

An LLP partner was entitled to exemption on share of profit received from a partnership firm under section 10(2A) because the firm had already been assessed to tax and had distributed post-tax profits. As the assessee LLP was shown as a partner in the registered deed and received its share accordingly, exemption could not be denied merely on the ground that the recipient was an LLP. The denial of exemption was set aside.

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Issues: Whether the assessee LLP was entitled to exemption under section 10(2A) on the share of profit received from a partnership firm, and whether denial of such exemption was justified.

Analysis: The partnership firm had already been assessed to tax on its income and had distributed the post-tax profits to its partners. The assessee LLP was shown as a partner in the registered partnership deed and had received its share of profit accordingly. On these facts, there was no basis to deny the exemption merely because the recipient was an LLP, when the income had already suffered tax in the hands of the firm.

Conclusion: The assessee was held entitled to exemption under section 10(2A) on the share of profit of Rs. 2,42,710/-, and the denial of the exemption was set aside.

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