SHANKER REFRIGERATION CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the asscssee, the Income-tax Appellate Tribunal, Delhi Bench, has stated the case and has referred the following question of law for the opinion of this court;

(2.) ASSESSEE, Shanker Refrigeration Company, is a registered firm, which during the accounting year ending 31st January, 1963, relevant to the assessment year 1964-65, constructed refrigeration plants at Narayanpur, near Calcutta.

(3.) FOR purposes of the Income-tax Act, a registered partnership firm and the partners constituting the same are distinct assessable entities different from each other. Accordingly, the question regarding admissibility of any rebate admissible to an individual partner, while computing his income, can be gone into only in his individual assessment and not during the firm's assessment. Learned counsel for the assessee urged that the question whether in a case where rebate under Section 84 has been granted to a firm, the same is also admissible in the hands of the partners constituting the firm is necessary to be decided in the firm's assessment as without doing that it would not be possible to work out the income of the firm to be allocated to individual partners. We are unable to accept this submission. So far as the assessee-firm is concerned its taxable income is to be worked out after making an allowance admissible to it under Section 84 of the Act. In this connection, any rebate or allowance deductible in the assessment of partners has no relevance. After the income has been so computed, the same, in the case of a registered firm, is to be allocated to the various partners. In computing the income of the firm, and allocating the same to its partners, the question regarding rebates admissible to individual partners does not crop up for consideration. Under the law what can be allocated to various partners of a firm is the income of the firm. Since "rebate" admissible to its partners cannot be said to be the income of the firm, no question of apportioning or allocating the same to the partners constituting the firm arises. Accordingly, in proceedings for the assessment of the firm, the question regarding admissibility of rebate under Section 84 of the Act to individual partners could not be gone into.