Description:
Whether contracts of firm executed by partners to be taken as sub-contracts for attracting application of section 194C?
The provisions of section 194C will not apply for the payments received and passed on to the partners. Hence, provisions of section 40(a)(ia) will not apply. The commission earned by the firm forms part of its income which alone must be routed through profit and loss account and in which case payments to partners would not be from the gross receipts of the firm. The commission income of the firm is only chargeable to tax in the assessment of the firm subject to the provisions of section 40(b).
Source:
1. www.tpcc.in
2. The Tax Referencer .Volume121. Issue No.6, 10.Oct, 2011, Page No.31
