1978 (10) TMI 25

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....C.J.--Messrs. Purshottam Das Rais, Gorakhpur, was a registered partnership firm. For the assessment year 1974-75, it derived income from interest. The income from interest accrued because the firm made fixed deposits with certain banks or in savings bank accounts. In due course, the firm was assessed and the share of each partner allocated. The assessee, in the present case, is one of the partners....

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....e assessee's share was allocated to him under s. 67(2) of the I.T. Act, 1961. Section 67 lays down the method of computing a partner's share in the income of the firm. Sub-section (1) provides the actual method of computation of a partner's share in the profits and losses of the firm. Sub-section (2) then provides : " The share of a partner in the income or loss of the firm, as computed unde....

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.... does not and cannot, by virtue of s. 67(2), change the head under which it war, determined in the case of the firm. The character of the income will remain the same even in the hands of the partners. Thus, after allocation, the income relating to interest would be taxable under that appropriate head. Section 80L applies to income from interest on certain specified securities or investments. Th....