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TMI Blog1972 (5) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... rom manufacturing or processing of goods and that the rebate should be allowed at 30 per cent? " The assessee is a private limited company and is a partner in a partnership firm styled as M/s. Hill Hardware Company, New Delhi, in which it has 50% share. While making the assessment for the year 1964-65 the Income-tax Officer had allowed a rebate @ 20% in the computation of corporation tax. The assessee moved an application under section 154 claiming that since the firm from which share income was derived was engaged in manufacturing business, the company itself should be deemed to be so engaged and rebate at 30% should have been allowed. The Income-tax Officer rejected the assessee's application on the ground that the assessee itself was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than the Life Insurance Corporation of India. The rate of super-tax prescribed in the case of a company is 55%. Under the proviso a rebate is to be allowed to certain companies under specified circumstances. We are concerned with clause (iii)(A) of the proviso, which says that in the case of a company, which is wholly and mainly engaged in the manufacturing or processing of goods, rebate would be at 30 per cent. on so much of its total income as does not exceed Rs. 2 lakhs and at 20 per cent. on the balance of the total income. The total income of the company, as computed by the Income-tax Officer, is Rs. 1, 18,993, which is less than two lakhs of rupees. It is not clear as to how the Income-tax Officer allowed the rebate at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is engaged in a business each partner shall be deemed to be so engaged. This principle appears to have been recognised by the Income-tax Act. When an assessment is made against a partnership firm carrying on business, the share of each partner is also assessed as income from business and not as income from other sources, even if a particular partner is not actively engaged in the business. In Sitaram Motiram Jain v. Commissioner of Income-tax, the same principle has been enunciated by K. T. Desai C.J. of the Gujarat High Court in the following words at page 412 : " We shall next deal with the point whether a business which has been carried on by a partnership could be regarded as a business carried on by a partner. A 'partnership' is defi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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