Section 40(b) of Income Tax Act, 1961—Deduction of remuneration paid to the partners u/s 40(b)—in the instant case, the assessee was asked to explain the nature of the interest income and to justify its claim for computation of remuneration to partners u/s 40(b)(v) of the Act.

Held that—This is a settled principle of law that the interest income for the purpose of ascertaining ceiling on the basis of book profit, the profit shall be in the profit and loss account. The interest income, thus, cannot be notionally be excluded for the purpose of determining the allowable of deduction of remuneration paid to the partners u/s 40(b) of the Act. In the case in hand both the shed rent and the interest income assessed as business income for the purpose of computing admissible deduction u/s 40(b). The Learned AO took a different view by not allowing the said deduction. However, in a similar set of facts, the Co-ordinate Bench in ITA No. 2853/Ahd/2011 for A.Y. 2008-09, decided the matter in favour of the assessee relying upon the judgment passed by the Jurisdictional High Court.[THE ASSTT. COMMISSIONER OF INCOME TAX VERSUS M/S. ASIAN FOOD INDUSTRIES] [2019] 10 ITCD Online (26) [ITAT AHMEDABAD]