COMMISSIONER OF INCOME-TAX, BIHAR vs RAMNIKLAL KOTHARI

The Supreme Court held that under Section 10(1) and Section 10(2) of the Income-tax Act, 1922, a partner's share of profits from a registered firm is considered business income, allowing for necessary deductions incurred in earning that income. The Court affirmed the High Court's decision that expenses such as salary, interest, and other remuneration are deductible when computing the partner's taxable income. The judgment disapproved the earlier ruling in M/s. Iswardas Subhkaran v. Commissioner of Income-tax, West Bengal, which restricted such deductions.