TaxTMI 
TaxTMI 
2000 (10) TMI 183
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....re that assessee was a partner in a firm viz., M/s Ramakrishna Cine Studio. The assessee received remuneration from the said firm in two capacities, i.e., one as partner of the firm and other by virtue of his being actor in two films made by the said firm. The remuneration received by the assessee as cine actor from the said firm aggregated to Rs. 6,50,000. Assessment of the firm was completed under s. 143(3), in which AO disallowed the remuneration received by the assessee as cine actor by invoking the provisions of s. 40(b). Consequent to the assessment of the firm, share income of the appellant was computed at a sum of Rs. 6,14,519. The said firm challenged the assessment in appeal and as a result of the appellate order passed by the CIT....
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....ssional income and the said income having not been received in the year under appeal, the same could not be included in total income under any circumstances, in the year under appeal. When the assessee agitated before the learned CIT(A), he has deleted the addition of Rs. 6,50,000 made by the AO in the order under s. 155, by observing as under: "I have duly and carefully considered the contentions urged by the appellant's representative. There is considerable force in them. While disposing of the appeal in the case of M/s Ramakrishna Cine Studios for the asst. yr. 1987-88 in ITA No. 401/AC 1(3)/CIT(A)-I/89-90 dt. 19th Oct., 1990, the CIT(A)-I, Hyderabad deleted the addition of Rs. 6,50,000 representing the remuneration paid to the appell....
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....On the date of hearing, learned Senior Departmental Representative drew our attention to the provisions of s. 67 of the IT Act, 1961, and pleaded that remuneration received by the assessee from the firm has to be included in the total income of the assessee-partner and s. 67 does not distinguish between different types of remuneration received by a partner from the firm. It was further pleaded by the learned Senior Departmental Representative that if the income of Rs. 6,50,000 is not taxed in asst. yr. 1987-88 i.e., the year in question and in subsequent year, it will tantamount to the income not having been taxed at all. He pleaded that even if it is held that the AO's action in including the said income in the order under s. 155 was not s....
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....ed jurisdiction to the AO to rectify a partner's assessment with a view to include his proper share income, as may be found necessary as a consequence of the assessment or reassessment of a firm, which is clear from the plain reading to the text of s. 155(1), which is reproduced hereunder: "Sec. 155(1)-Where, in respect of any completed assessment of a partner in a firm for the assessment year commencing on the 1st day of April, 1992, or any earlier assessment year, it is found- (a) on the assessment or reassessment of the firm, or (b) on any reduction or enhancement made in the income of the firm under this section, s. 154, s. 250, s. 254, s. 260, s. 262, s. 263 or s. 264, or (c) on any order passed under sub-s. (4) of s. 245D ....