ASSISTANT COMMISSIONER OF INCOME-TAX Vs. R JAYACHANDRAN

JUDGEMENT

(1.) This departmental appeal is directed against the order dated 22-5-1992 of the Dy. Commissioner of Income-tax (Appeals), A Range, Madras relating to the assessment year 1989-90.

(2.) The assessee, an individual, is deriving income from salary, profession, and share of income of (a) Suhrudaya Clinical Laboratories and (b) Suhrudaya Cardiac Research Centre. The previous year relevant to the assessment year 1989-90 was the year of account ending on 31-3-1989.

(3.) The said disallowance was one of the subject-matters of the appeal filed by the assessee before the first appellate authority. The assessees case before that authority was that the assessee had made a deposit on his own with the IDBI; that such deposits came to be made after receipt by the assessee of his share of income of the aforesaid two firms; that in the circumstances the proviso to section 32AB was not applicable; and that consequently the Assessing Officer was not justified in rejecting the assessees claim. In particular, the assessees case was that the proviso to section 32AB (1) only prohibited allowance of any further deduction under section 32AB once again in the hands of the partners on the basis of the deposit made by the firm, but that did not per se disentitle the partner to any further relief under section 32AB if he were to make a further deposit amounting to 20% of the income representing profits from business or profession falling to his share and that, therefore, the Assessing Officer had clearly misdirected himself in law.