TaxTMI 
TaxTMI 
1976 (9) TMI 75
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.... Rs. 4,275 . .. Rs. 9,375 . Less : Urban Land Tax Rs. 742 . . Rs. 8,633 . Less : 1/6th for repairs Rs. 1,438 . , Rs. 7,195 . Less : 2/3rd used for business Rs. 4,796 . , Rs. 2,399 . Less : 1/2 for owners occupation Rs. 1,200 . , Rs. 1,200 Rs.1,200 (b) Bangalore properties : , . L2,L3,L4,L5 & L6, Giddappa Lane, Bangalore Income form L2 alone Rs. 240 . Less : Municipal taxes Rs. 28 . , Rs. 212 . Less : 1/6th for repairs Rs. 35 . (L3,L4,L5 & L6 used for business purposes) Rs. 177 Rs.177 , , Rs. 1,377 The assessee claimed that 2/3rd of the property No. 192, Triplicane High Road, Madras-5 and properties L3,L4,L5 and L6 at Giddappa Lane, Bangalore were used for business purposes. While the Income-tax Officer accepted the income admitted by the assessee from the properties at Bangalore, he did not accept the computation of income made by the assessee in respect of property No. 192, Triplicane High Road, Madras-5 on the ground that the business of the firm of M/s. Continental Packers, in which the assessee was a partner and which had carried....
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.... He referred to the decision of the Supreme Court in the case of Commissioner of Income-tax, Bihar vs. Ramniklal Kothari (2), in support of his stand. He further submitted that the decision of the Kerala High Court in 87 ITR 41 also supports his stand. 5. On behalf of the Revenue reliance was placed on the orders of the lower authorities. The learned departmental representative Shri. V.D.Gopal vehemently contended that the assessee is not eligible to the exclusion of the portion of the property used for the business of M/s. Continental Packers. He submitted that the above firm was a separate entity in law and therefore the relief under s.22 of the Income-tax Act, 1961 would not be available to the assessee. For the proposition that the firm is a separate entity under the income tax act he referred to s.2(31)(iv) of the Income-tax Act, 1961 and to the decision of the Supreme Court in the case of Commissioner of Income-tax, West Bengal vs. A. W. Figgies & Co. and Others (3), and in the case of Shivram Poddar vs. Income-tax Officer, Central Circle II, Calcutta and Another (4). He further submitted that the decision of the Supreme Court in 74 ITR 57 submitted by the learned counsel ....
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....e above conditions. As pointed out earlier admittedly for the business of M/s. Continental Packers the property at Bangalore had also been used. The Income-tax Officer had accepted the claim of the assessee for excluding such property from the computation of the annual value. But he had disallowed the assessee's claim only in respect of the Madras property. Now, with respect of the property at Madras the assessee is admittedly the owner. There is also no dispute that 2/3rd of the said property had been used for the business carried on by the assessee but as a partner of the firm of M/s. Continental Packers. Further the profits in respect of the said business carried on in the said premises has admittedly been charged to income-tax. Shri Gopal pointed out that the business that was carried on in the said premises was not carried on by the assessee ut by the firm and, therefore, the assessee but by the firm to the relief under s.22. This argument overlooks the fundamental concept of partnership. s.4 of the Partnership Act reads as under:- "4. " Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting fo....
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....ncome-tax Act, 1922. Share in the profits of a partnership received by a partner is "profits and gains by a business" carried on by him and is on that account liable to be computed under s.10, and it is a matter of no moment that the total profits of the partnership were computed in the manner provided by s.10 of the Income-tax Act and allowance admissible to the partnership in the computation of the profits and gains were taken into account. Income of the partnership carrying on business is computed as business income. The share of the partner in the taxable profits of the registered firms liable to be included under s. 23(5) (a) (ii) his total income is still received as income from business carried on by him. Counsel for the Commissioner accepted, and in our judgement counsel was right in so doing, that the share of the respondent from the profits of the firms was income from business carried on by the partner. Business carried on by a firm is business carried on by the partners. Profits of the firm are profits earned by all the partners in carrying on the business. In the individual assessment of the partner, his share from the firm's business is liable to be taken into account....
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....ner of Income-tax (97 ITR 516) following the decision in Commissioner of Income-tax vs. Ramniklal Kothari(74 ITR 57) that in the case of a partnership the business is not carried on by the partnership as such, but the business shall be deemed to be the business of the partners. If that is so, certainly the assessee in this case had used the assets for the purpose of his business as he was a partner of the firm. The Appellate Assistant Commissioner and the Tribunal were, therefore, right in holding that the depreciation was allowable in the individual assessment of the assessee. We, accordingly, answer the reference in the affirmative and against the revenue. As per the above rulings of the Supreme Court and that of the Madras High Court, the premises in question could be said to have been used for the purpose of the assessee's business as he was a partner in the firm of M/s. Continental Packers. 9. The decision of the Kerala High Court in the case of Commissioner of Income-tax. Kerala vs. Indo-Marine Agencies, Cochin(1), referred to by the learned counsel for the assessee also supports the assessee's stand. In that case the income of the assessee, a registered firm, included ....