1994 (10) TMI 110

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....22nd January, 1990 of the Deputy Commissioner of Income-tax (Appeals), Rohtak. The dispute is relating to allocation of share amongst the partners of the firm. 2. The assessee had made a claim under section 32AB which was allowed by the Assessing Officer in computing income of the firm. This deduction, however, was added back for the purpose of apportionment of shares amongst the partners. Aggr....

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....f income from profits and gains of business or profession subject to fulfilment of certain conditions. Since the assessee has fulfilled the conditions as provided under section 32AB deduction was allowed to the firm. A proviso has been inserted by the Finance Act of 1987 with effect from1-4-1987, which reads as under:--- "Provided that where such assessee is a firm or any association of persons....

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.... income of the firm,--- (i) the income-tax payable by the firm itself shall be determined; and (ii) the share of each partner in the income of the firm shall be included in his total income and assessed to tax accordingly." 6. In this case, the Assessing Officer after having computed the income of the firm has determined the income-tax payable by the firm itself. The next step as per sect....

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....mputation of income of the partner. When income of the firm is determined under section 143(3) or 144 the share has to be allocated amongst the partners under section 182, and thereafter, if deduction is claimed by the partner under section 32AB, such deduction is prohibited as the similar deduction has been allowed in the case of the firm. The proviso inserted by the Finance Act of 1987, in our v....