1971 (11) TMI 20

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.... allowed to the partners? " The year of assessment is 1963-64 and the accounting period is that which ended on March 31, 1963. The export profit rebate is allowable under clause (i) of sub-section (5) of section 2 of the Finance Act, 1963. That clause runs as follows : " (5) In respect of any assessment for the assessment year commencing on the 1st day of April, 1963-- (i) an assessee being an Indian company or any other company which has made the prescribed arrangements for the declaration and payment of dividends within India or an assessee (other than a company) whose total income includes any profits and gains derived from the export of any goods or merchandise out of India, shall be entitled to a deduction, from the amount of ....

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....63. They relied on the view expressed by the Gujarat High Court in the decision in Commissioner of Income-tax v. Arun Industries. The question that arose for decision therein was whether the registered firm was entitled to the benefit of section 15C of the Indian Income-tax Act, 1922, when the partners had already been given the benefit of that section in their assessments. The court came to the conclusion that both the firm and the partners are entitled to the benefit of section 15C in their respective assessments. It seems to have been assumed in that case that the share income of the partners determined under section 23(5)(a)(i) of the Indian Income-tax Act, 1922, also included the profits or gains derived from a new industrial undertaki....

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....e to be divided among the partners according to the proportion in which profits are to be shared by the members of the firm. So the share of the partner will include the profits or gains from export. According to the wording of the section, if the income of an assessee included the profits and gains from export, the assessee is entitled to the deduction provided by the section. Counsel on behalf of the revenue suggested that the share income of a partner of a firm that was doing export business cannot include profits or gains from export because the export had been done by the firm and the sharing of the income is thereafter. We are unable to accept this argument. The question is about the nature of the income. The section does not say that....