Deduction under section 35CCA upheld for partner with share income; no referable question of law arose.

A partner deriving share income from firms was held entitled to deduction under section 35CCA of the Income-tax Act, 1961, because the term "assessee" in section 2(7) was treated as wide enough to cover a person liable to pay tax or any other sum, and the benefit was not denied merely because the partner was not directly carrying on a profession. Reading section 35CCA with section 67, the court found no illegality in the Tribunal's approach and upheld the deduction. It also held that no referable question of law arose under section 256(2), so the Revenue's application was rejected.

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Issues: Whether, on the facts found, the assessee, being a partner deriving share income from firms, was entitled to deduction under section 35CCA of the Income-tax Act, 1961, and whether any referable question of law arose for reference under section 256(2).

Analysis: The Tribunal held that the expression "assessee" in section 2(7) of the Income-tax Act, 1961 is wide enough to include a person by whom tax or any other sum is payable, and that a partner receiving income from a firm cannot be denied the statutory benefit merely because he was not directly carrying on a profession. On the facts found, and having regard to section 35CCA and section 67 of the Income-tax Act, 1961, the court found no illegality in the Tribunal's approach and accepted its conclusion that the claimed deduction was available.

Conclusion: No referable question of law arose. The Revenue's application was rejected and the assessee's entitlement to deduction under section 35CCA was upheld.

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