This is appeal by assessee which is directed against order of AAC dt 27th Aug., 1983 wherein he has upheld action of ITO in denying Standard deduction claimed by assessee under s. 16(1) of IT Act, 1961 out of remuneration received from firm M/s M.N.Karuppiah Nadar & Sons in which he represents his respective HUF. case of ITO as well as AAC who agreed with him was that there was no relationship of employer and employee and, therefore, standard deduction under s. 16(1) of Act was not permissible. facts of case in brief are that Shri K. Jeganatheesan is partner in firm M/s M.N.Karuppiah Nadar & Sons representing his HUF and has received remuneration of Rs. 12,000 for services rendered to firm. share of profit excluding remuneration was assessed in hands of respective HUF and only remuneration was separately assessed in hands of assessee. According to assessee standard deduction was to be allowed and he relied on decision of Bombay Bench 'A of Tribunal in case of Mohamad Ibrahim Shahdad vs. ITO in ITA No. 941/ASR/1978-79 reported in (1980) 18 CTR (Trib) 3 (Bom). Ld. departmental representative has vehemently urged that as per ratio of Supreme Court in case of R.M.Chidambaram Pillai vs. CIT 1977 CTR (SC) 71: (1977) 106 ITR 292 (SC) there can be in strict law no relationship of employer and employee between firm and partner and, therefore, supported orders of authorities. We have duly considered rival contentions. At outset we have to observe that ITO has chosen to assess remuneration only in hands of assessee in his individual capacity although remuneration formed part of share of profits as per allocation of share of profits between partners in terms of s. 67 of IT Act, 1961. On these admitted facts short question for consideration is whether assessee is entitled to standard deduction under s. 16 (1) of Act or not. We are not concerned with issue whether remuneration forms part of business profits or it is in nature of business profits in this case. Madras High Court has observed in case of Commr. of Agrl. IT. Madras vs. Tipperary Estates Co. (1970) 76 ITR 396 (Mad) that on findings of Tribunal that services were rendered by partner de hors partner, they were entitled to remuneration qua servant of firm and, therefore, such remuneration was allowable expenditure laid out wholly and exclusively for purpose of estate. In case of assessee, there is no dispute about fact that assessee has rendered managerial services to firm which is evident from supplementary deed of partnership dt. 29th April, 1978 which in cl. 6 thereof authorises remuneration to partners for managerial services rendered by them at such rates as may be agreed upon by partners. decision of Madras High Court, cited (supra) is authority to proposition that partner can render service to firm de hors partner and he is entitled to remuneration qua servant of firm. Tribunal, Bombay A-Bench has held in case of Mohamad Ibrahim Shahdad., cited supra after considering similar objections raised by Department, that partner is entitled to standard deductions under s. 16 (1) out of remuneration received from firm for services rendered to it. relevant portion of order of Tribunal reads as under: ' In this connection, we may, refer to s.67 of Act regarding method of computing partner's share in income of firm. In that section, it is provided that while computing total income of assessee, who is partner of firm, whether net result of computation of total income of firm is profit or loss, his share (whether net profit or net loss) shall be computed as follows: (a) any interest, salary, commission or other remuneration paid to any partner in respect of previous year. It is, therefore, clear that partner can draw salary from firm in which he is partner. We may also refer to decision of Madras High Court in case reported in (1970) 76 ITR 396 (Mad) where it has been held that on basis of finding of Tribunal as it was established that Managing partner and another partner were rendering services de hors partner, they were entitled to remuneration qua servants of firm and hence Tribunal had come to correct conclusion. It is, therefore, clear that partner of firm is entitled to salary for rendering services to firm and in case person draws salary he is entitled to statutory deduction under s. 16 of Act, under head salaries. In our view s. 40(b) merely provides that in case of firm any payment of interest, salary, bonus, commission or remuneration made by firm to person of firm would not be deducted in computing income chargeable under head 'profit and gains of business or profession, which does not support contention of Revenue that partner of firm is not entitled to salary but s. 40(b) merely provides that no deduction for same will be made in case of firm while computing of income chargeable under Head 'profit and gains of business or profession. In view of above, we set aside order of AAC and direct ITO to allow claim of assessee. In result, appeal is allowed". Following respectfully aforesaid decision of Tribunal, we accept ground taken by assessee and claim for standard deduction and set aside and reverse orders of authorities on this point and direct ITO to allow standard deduction under s. 16(1) of IT Act, 1961. In result, appeal is allowed. *** K. JEGATHEESAN v. INCOME TAX OFFICER