Salary paid to partner ,disallowed to the firm as it exceeds the limit. the same wrongly taken as business income by partner in his return

[Asked by Guest]

Sir , the firm where i am a partner was disallowed salary paid to me as they had loss and my salary exceeded the allowable limit. However i missed this information and claimed as salary in my return as business income and paid tax accordingly. This case is for a.y 2013-14. I did not file any revise return for this A.Y. I have filed a rectification petition for correction of excess business income as there is no scope of revised return now. now my query is can I say that the salary received by me in excess over the prescribed limit is my drawings from the firm , Can the firm pass a reverse entry for excess salary paid in the current F.Y 2016-17.

Please advice both accounting and taxation treatment.

thanks

AI Summary

Taxability of disallowed partner remuneration: statutory assessment principle prevents firm's disallowance being taxed again in partner's hands.
Salary paid to a partner was disallowed to the firm as it exceeded the allowable limit, yet the partner treated it as business income and paid tax; accounting reversal is not automatically required if the payment was made per the partnership deed. Remedies noted include claiming a refund under the relevant refund provisions and invoking the statutory assessment principle that amounts disallowed to the firm should not be taxed in the partner's hands, with appellate remedy recommended if double taxation persists.