assessment of firm

[Asked by Guest]

Will transfer of income from firm by partner to an assignee be treated as subpartnership and thus,will the same be exempt in hands of assignee???

AI Summary

Sub-partnership diversion of a partner's share converts income at source, making it assessable to the sub-partnership under tax rules.
A sub-partnership creates an overriding title that diverts a partner's share at source, vesting an enforceable right in the sub-partnership to receive profits and bear losses; where such diversion exists the diverted share is to be treated as the income of the sub-partnership for income-tax purposes, whereas a simple assignment confers only passive rights to profit shares and dissolution proceeds and does not alter the tax character absent diversion at source.