COMMISSIONER OF INCOME TAX Vs. BRIJ RAMAN DAS

JUDGEMENT

(1.) MESSRS. Purshottam Das Rais, Gorakhpur, was a registered partnership firm. For the assessment year 1974-75, it derived income from interest. The income from interest accrued because the firm made fixed deposits with certain banks or in savings bank accounts. In due course, the firm was assessed and the share of each partner allocated. The assessee, in the present case, is one of the partners. He claimed relief under Section 80L of the I.T. Act, 1961, in respect of the interest income. This claim was repelled by the ITO but was accepted on appeal. The revenue went up in appeal to the Tribunal but failed. The claim of the assessee was upheld by the Tribunal.

(2.) AT the instance of the CIT, the Tribunal has referred, for our opinion, the following question of law :

(3.) IT is evident that Sub-section (2) provides for the carrying over of the allotted share of income of each partner under the same head under which it was determined in the case of the partnership-firm, e.g., if interest income was earned by a partnership firm, the share allocable to each partner would be carried over to his individual assessment as income from interest. Thus, the income under each head will retain its character as such even though it is assessed all over again in the hands of the individual partner. The process of allocation of the income to the hands of the partner does not and cannot, by virtue of Section 67(2), change the head under which it was determined in the case of the firm. The character of the income will remain the same even in the hands of the partners. Thus, after allocation, the income relating to interest would be taxable under that appropriate head.