Payments made to retiring partners is diversion of income by overriding title and is not an income of the assessee firm.
The true test for the application of the rule of diversion of income by overriding charge was whether the amount deducted in truth never reached the assessee as income.
Precedents relied upon:
~ CIT vs. A.F. Ferguson & Co. in ITA(L)No.97/2011, dated 21.07.2011
~ CIT vs. C.C. Chokshi & Co. in ITA No.209 of 2008 and 193 of 2008, dated 25.07.2008
~ Deloitte Haskins & Sells in ITA No 2079/CHNY- 2016
~ CIT vs. Mulla & Mulla & Craigie Blunt & Caroe [1991] 190 ITR 198 (Bom)
~ Sital Das Thirath Das [1961] 41 ITR 367 (SC)
The Copy Of the Order as Under:
