Registered firm income cannot be reworked to raise a partner's assessable share beyond the firm's assessed total.

Where a registered firm's total income has already been assessed and apportioned under section 23(5)(a), the tax authorities cannot add a further amount to one partner's share on the basis of the firm's Pakistan loss so as to make the partner's assessable income exceed the firm's own total assessed income. The Indo-Pakistan Agreement, issued to avoid double taxation, did not alter the taxation law and could not override the statutory allocation scheme or enlarge the partner's tax burden. The partner's assessable share was therefore confined to the amount allocated from the firm's assessed income.

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Issues: Whether, after the total income of a registered firm had been apportioned among the partners under section 23(5)(a), the income-tax authorities could add to a partner's share a further amount on the footing of the firm's Pakistan loss and thereby assess the partner on a sum exceeding the firm's total assessed income.

Analysis: Section 23(5)(a) requires the total income of a registered firm to be assessed and then divided among the partners according to their shares, with the partner's share being taken into his individual assessment. Once the firm's total income has been finally ascertained and allocated, the Department cannot reassess the same partnership income in a different manner for one partner so as to increase his assessable income beyond the firm's own computed total. The Indo-Pakistan Agreement, issued by Notification No. 28 under section 49AA, was intended to avoid double taxation and expressly stated that it did not modify the relevant taxation laws; it could not be used to enlarge the partner's tax burden or to override the statutory scheme of section 23(5)(a).

Conclusion: The additional amount could not be added to the assessee's share of the registered firm's income. The correct assessable share of the assessee was Rs. 56,985 and not Rs. 75,549.

Ratio Decidendi: Where the income of a registered firm has been ascertained and apportioned under section 23(5)(a), the revenue cannot, by a different computation under an agreement or otherwise, increase a partner's assessable share beyond the firm's total assessed income.

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