The assessee, a firm of Chartered Accountants, provided by its partnership deed that the profits would be divided equally. By a supplementary deed of 1992 it was agreed that the working partners would be paid such remuneration as may be “mutually agreed upon” subject to the provisions of the Act. It was also specified that the total remuneration payable to the working partners would be an amount permissible as remuneration to the working partners under the Act. The AO, CIT (A) & Tribunal held that the deed did not satisfy the conditions of s. 40(b)(v) and deduction was not admissible. On appeal to the High Court, HELD dismissing the appeal.
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