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Issues:
1. Whether the income-tax authorities and the Tribunal can allocate relief under section 84 of the Income-tax Act among partners of a firm? 2. Whether rebate under section 84 of the Act is admissible to individual partners of a registered firm during the firm's assessment? 3. Can the question of admissibility of rebate to individual partners be decided during the assessment of a registered firm? Analysis: 1. The case involved the question of whether the income-tax authorities and the Tribunal have the authority to allocate relief under section 84 of the Income-tax Act among partners of a firm. The assessee, a registered firm, claimed relief under section 84 for constructing refrigeration plants. The Income-tax Officer allowed the rebate to the firm but directed that no rebate would be given to individual partners. The Appellate Assistant Commissioner upheld this decision, stating that the question of rebate admissible to partners did not arise in the firm's assessment. 2. The Tribunal dismissed the appeal by the assessee, emphasizing that the relief due to partners should be considered in their individual cases, not during the firm's assessment. The Tribunal clarified that the income of the firm should be computed first, and then allocated to partners, without considering rebates admissible to individual partners. The Tribunal's decision was based on the principle that a registered partnership firm and its partners are distinct assessable entities. 3. The assessee contended that the question of whether partners are entitled to rebate should be decided during the firm's assessment to determine the income allocated to partners accurately. However, the court rejected this argument, stating that the rebate admissible to partners is not considered the income of the firm. The court distinguished a previous case where individual partners were entitled to rebate, noting that it was not applicable to the assessment of a firm. 4. Ultimately, the court answered the question in the negative, ruling in favor of the revenue. It held that the question of admissibility of rebate under section 84 to individual partners cannot be decided during the assessment of a registered firm. The assessee was directed to pay the costs of the reference to the Commissioner of Income-tax. This judgment clarifies the distinction between a registered firm and its partners for income tax purposes and establishes that the question of rebate admissibility to individual partners should be addressed in their individual assessments, not during the assessment of the firm.
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