India's ITAT Allows Partner Remuneration Deductions and Presumptive Taxation

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) ruled that a bona‑fide clerical error in an income‑tax return cannot be used to deny a partner’s remuneration deduction. The tribunal set aside the order of the Commissioner of Income Tax (Appeals) and directed verification of the claim of Rs 6.41 lakh for Adarsh Machinery and Tools.

Separately, the Delhi ITAT held that remuneration received by a working partner can qualify for presumptive taxation under Section 44ADA. The tribunal rejected the tax department’s view that such remuneration is not a “gross receipt” and emphasized that the statute does not require an independent practice. While the Delhi decision is taxpayer‑friendly, a Mumbai ITAT bench has taken the opposite stance, leaving the issue unsettled.