22 April 2009
In case of a partnership firm which is evidenced by a deed, there is a clause regarding the maintenance of books of accounts in the deed. If the firm does not maintain books of accounts and files return u/s 44AD declaring 8% profit after deducting interest and remuneration then can the AO reject the claim of interest and remuneration on the basis of the reason that the books of accounts have not been maintained by the firm and it is a violation of the clause in the deed
22 April 2009
If book of account is not mentioned as per section 44AA the AO can tax the firm on presumption basis @ 8% u/s 44AD, however he(the AO) can not prevent and disallow the firm to pay interest and remuneration to partner
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