1997 (8) TMI 25

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....d in all the cases is the taxability of the interest earned by a partner of a firm engaged in the manufacture of tea and the salary income of the partner received from that firm. All the revision petitioners are partners in the same firm. The assessment years in question are 1974-75, 1975-76, 1976-77 and 1980-81. Learned counsel contended that income-tax has been paid under the Indian Income....

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....r of assessment made by the Income-tax Officer under the Indian Income-tax Act either before the Assessing Officer or before the Assistant Commissioner to whom they had preferred appeals. The order of the Tribunal which affirmed those orders of the Assessing Officer and the appellate authority also does not contain any reference to the order if any passed by the Income-tax Officer under the Inc....

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....y received by the partner to the extent of 60 per cent. of income is taxable. Bonus also stands on the same footing as the share of profit received by the partner to the extent of 60 per cent. of income and is taxable as held in the case reported in CIT v. R. M. Chidambaram Pillai [1977] 106 ITR 292 (SC). In CIT v. R. M. Chidambaram Pillai [1977] 106 ITR 292, the apex court held that the flexible ....

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....ts profit-computation. The reason is this : The partners in a firm are ultimately entitled to the entire profits of the firm, according to their shares in the business. Therefore, the entirety of such profits should be brought to charge and no portion be exempted by giving the same away to a partner as his salary, bonus, commission, remuneration or interest. A partner is bound to find the necessar....