1980 (7) TMI 74

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....st period and at Rs. 35,573 for the second period is in accordance with law ? " M/s. N. S. Corporation was a partnership firm consisting of 8 partners up to August 4, 1972 on which date one of the partners, Ramachandra Shastry, passed away. There was thus a change in the constitution of the firm and the firm continued with the 7 surviving partners and deed of partnership was also executed in that behalf. Prior to the death of Ramachandra Shastry as well as subsequently, the partners of the firm were entitled to share the profit and loss equally. The question referred to this court involves the method to be adopted for the allocation of the profits between the partners in the two periods, i.e., prior to and subsequent to, the change in the ....

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....payable by the firm had to be deducted from the total income of the firm and in the instant case by making such deduction, the balance amount would be Rs. 3,63,870 and this amount had to be apportioned between the partners as provided in the proviso to s. 187(1) of the Act. It observed that there was no necessity for reapportioning the tax between the two periods because even if the tax was deducted from the total income and the net figure was apportioned between the two periods in the same ratio, as was determined by the ITO, namely, Rs. 1,51,515 to Rs. 3,28,382, the result would be the same, and dismissed the appeal by the assessee. It is contended by Sri Srinivasan, learned counsel for the petitioner, that the proviso to s. 187 would ap....

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.... "In computing the total income of an assessee who is a partner of firm, whether the net result of the computation of total income of the firm is a profit or a loss, his share (whether a net profit or a net loss) shall be computed as follows: (a) any interest, salary, commission or other remuneration paid to any partner in respect of the previous year, and, where the firm is a registered firm or an unregistered firm assessed as a registered firm under clause (b) of section 183, the income-tax, if any, payable by it in respect of the total income of the previous year, shall be deducted from the total income of the firm and the balance ascertained and apportioned among the partners ;..." By making the deduction as enjoined by s. 67(1)(a) o....