Provisional assessment of partner's share income upheld before firm assessment is completed

A partner's share income from a firm may be assessed in the partner's hands before the firm's assessment is completed, because the Act contains no statutory prohibition against provisional assessment on that basis. The High Court held that the assessing authority was entitled to include the partner's share income provisionally even though the firm's assessment had not yet been finalised. The reference was answered against the assessee and in favour of the revenue on the substantive tax issue.

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Issues: Whether a partner's share of income from a firm can be assessed in the partner's hands before the firm's assessment is completed.

Analysis: The reference concerned assessment of an individual's share income from a firm for an assessment year, where the assessing authority included the share provisionally before the firm's assessment was finalized. The Court found no provision in the Act prohibiting assessment of the partner on the basis of provisional share income merely because the firm's assessment remained incomplete.

Conclusion: The question was answered in the affirmative against the assessee and in favour of the department; the partner's share income could be assessed before completion of the firm's assessment.

Final Conclusion: The reference was decided in favour of the revenue on the substantive tax issue, and the assessee's objection failed.

Ratio Decidendi: In the absence of a statutory prohibition, a partner's share income may be assessed provisionally in the partner's hands even before the firm's assessment is completed.

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