Pradeep Kumar Jain (Chartered Accountant) 02 February 2011
sir,
interest on capital & remuneration to partners is provided in the partnership deed but due to loss in the current year, partners don't want to pay the same during the year.
is it necessary to abide by the clauses of the partnership deed and if the above is not paid, can the i.t.o. reject the firm as a registered partnership firm, please advise.
Vineet (Director) 03 February 2011
No. partners can choose to forgo interest and remuneration. AO can not add hypothetical income.
However if partners had borrowed funds to invest in the firm, relatable interest may be disallowed in the hands of partner.
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