Income tax treatment of a Partner's income by supplying goods to the Partnership firm
Dear Sir/Madam
Please let me know how the income tax is accounted for the individual in the following case.
Mr 'X' is a active partner in a partnership firm called 'AB & Co' which is using land taken on lease from Mr 'X'.
Mr 'X' is paid lease payment for the land from the firm 'AB & Co' .
Mr 'X' also supplies some raw materials in his individual capacity and gets the payment from the firm 'AB & Co' .
Mr 'X' receives remuneration within the allowed ceiling (because he is the active partner)
other than this , Mr 'X' receives his share of the profit from the firm.
1. Whether this type of muliple role of the partner and his earning is legal as per IT rule?
2. How the income will be treated in the case of the Partner 'X'
1 Answer from Attorneys
1. Legal.
2. Lease rent may fall under income from house property, if leasing is not business of X. Remuneration and trade of material incomes may fall under income from business.
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