1984 (5) TMI 112

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...., standard deduction under s. 16(1) of the Act was not permissible. The facts of the case in brief are that Shri K. Jeganatheesan is a partner in the firm M/s M.N. Karuppiah Nadar & Sons representing his HUF and has received remuneration of Rs. 12,000 for services rendered to the firm. The share of profit excluding the remuneration was assessed in the hands of the respective HUF and only the remuneration was separately assessed in the hands of the assessee. According to the assessee standard deduction was to be allowed and he relied on the decision of the Bombay Bench 'A' of the Tribunal in the case of Mohamad Ibrahim Shahdad vs. ITO in ITA No. 941/ASR/1978-79 reported in (1980) 18 CTR (Trib) 3 (Bom). 2. The ld. departmental representative....

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.... firm which is evident from the supplementary deed of partnership dt. 29th April, 1978 which in cl. 6 thereof authorises remuneration to the partners for the managerial services rendered by them at such rates as may be agreed upon by the partners. The decision of the Madras High Court, cited is an authority to the proposition that a partner can render service to the firm de hors a partner and he is entitled to remuneration qua a servant of the firm. The Tribunal, Bombay A-Bench has held in the case of Mohamad Ibrahim Shahdad., cited supra after considering similar objections raised by the Department, that the partner is entitled to standard deductions under s. 16 (1) out of the remuneration received from the firm for services rendered to it....