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Issues: Whether the share of interest income from a partnership firm, when apportioned to a partner under section 67(2) of the Income-tax Act, 1961, retains its character as interest income so as to qualify for deduction under section 80L of the Income-tax Act, 1961.
Analysis: Section 67(2) requires a partner's share in the firm's income to be apportioned under the same head under which the firm's income was determined. The allocation to the partner does not alter the nature or head of the income; interest income earned by the firm continues to be interest income in the partner's individual assessment. Since section 80L applies to an individual and extends relief in respect of specified interest income, the partner, though deriving the amount through the firm, is entitled to the deduction if the income otherwise falls within that provision.
Conclusion: The partner was entitled to deduction under section 80L on the interest income allocated to him under section 67(2), and the question was answered in the affirmative in favour of the assessee.
Ratio Decidendi: Income apportioned to a partner under section 67(2) retains its original head and character in the partner's hands, and a deduction available to an individual on that head cannot be denied merely because the income was first earned by the firm.
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