Business income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2011 We have written off in partnership business, disputed creditors under the head credit balance written off. Whether the same is business Income ? Can we pay remuneration as per income tax act from income from business including above income ? We will be thankful if the answare with respective case citation.

Thanks and await for quick response

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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02 August 2011 Remuneration is based on the book profit of the firm where in the current profit of the company, the expenses to the extent disallowable are added and income considered under other heads of income are deducted. Sundry creditors written off is a business income and it will not form part of any other head of income. It means that it shall be considered for the purpose of book profit and remuneration be calculated on the same.