12 May 2010
A firm as a three Partners. A partner is retiring. The retiring partner has credit balance of Rs. 10lacs in the firm. But firm is giving him 20 lacs. The Firm will enter into an agreement with the outgoing partner that he will not do the same business for 10 years and not entitled to use the firm logo and name.I want to know the following:- 1) Since the firm is paying him 10 lacs more than his actual balance, whether the excess amount is goodwili. Is firm claim that amount amount as an expenditure.
2) is partner has to pay tax on the excess amount.
12 May 2010
The amount of Rs. 20 Lakh is paid as 'non-compete fees'. The amount paid as such can be claimed as an expenditure in the books of account. The partner who is received the amount has to offer it for tax
13 May 2010
Under which section of the Income Tax the amount is deductible. Is it not necessary to raise Goodwill in the books for the amount paid to partner in excess of his Capital
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