Question And Answer
Querist: Manoj jain
Answered by: , , , , ,
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Date: December 27, 2022
Query asked by Manoj jain

Assessee is LLp having 8 partners, engaged in business of construction.  Is having 4 diffrent housing project . One project which is eligible for deduction u/sec.80IBA of which profits are shared equally. Remaining 3 projects which are not eligible for deduction u/sec.80IBA , they have decided to share profit sharing ratio in diffrent ration as per their mutual understanding due to involvement of partners, capital contribution by the partners .

Issues :

1. Whether this arrangement is permissible under LLP act as well as Income Tax Act

2. Whether credit of AMT paid on project can be use against tax liability of other 3 projects.

Pl guide .

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Yes, the Partnerships are fundamentally on the basis of Indian Contract Act, 1882. Therefore, as long as the objects are legal and there is a mutual understanding amongst the partners, such an arrangement is possible.

AMT is on the basis of total computation of income of all consolidated projects and is not computed project wise.

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