1995 (3) TMI 129

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....anufacturing business admittedly there is a loss. However, from the firm the assessee received share of profits which is the larger in amount than the amount of loss in proprietary concern. Therefore, the resultant income is positive. The assessee made deposit under section 32AB and claimed deduction. This was rejected by the tax authorities on the basis that there is no positive income under the head 'Business of proprietary concern'. The share of profit from the firm could not be considered for the purpose of claim. The fact that the firm had not claimed any deduction under section 32AB was irrelevant. Aggrieved, the assessee is before us. 3. The representatives of both the sides were heard. 4. In our opinion, the claim of the as....

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....ve is given only to the firm and not to the partner. 4.2 Now, the provisions of section 32AB as they stood initially, it was found, could conceivably lead to an interpretation that the deduction could be claimed in the case of a firm as also/or in the case of a partner in respect of the income derived from the business carried on by the firm. Since this was not the intention it was sought to be clarified by Finance Act, 1987 that deduction under section 32AB shall be allowed only in the assessment of the firm and not in the hands of the partner in respect of the income derived from the business of the firm. This is evident from the notes on clauses to the Finance Bill, 1987 at 165 ITR at page 124 and page 152 (Statute). But while making ....