COMMISSIONER OF INCOME TAX Vs. BHUPENDRA KUMAR PATEL

JUDGEMENT

(1.) THIS is a reference called for by this court on application made by the Revenue under Section 256(2) of the Income-tax Act, 1961, from the Tribunal and the Tribunal has referred the following question of law for opinion of this court :

(2.) THE brief facts giving rise to this reference are this : THE assessees/non-applicants are partners in P. D. and Company, Raipur, which firm had deposits in the bank yielding interest income, which was assessed in the hands of the said firm and the share income of the aforesaid three partners including interest income was assessed in the hands of the said partners. THE said partners had claimed deduction under Section 80L of the Income-tax Act for the part of the interest income from the bank which was included in the share income from the firm, but the said claim was rejected by the Income-tax Officer on the ground that the said partners were not owners of the bank deposits as the deposits were not in the name of the partners, but in the name of the firm, which was a separate entity.

(3.) NOW, after "this amendment, no deduction in the income of the partners out of the interest is permissible. Therefore, this reference has to be answered in favour of the Revenue and against the assessee.