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TMI Blog1994 (11) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Act, 1961, in respect of their share of profit from the interest on fixed deposits with banking companies and interest on Government securities earned by the firm in which the assessees are partners ?" The assessees in this reference are (1) Vishnu M. Singre, (2) Gopalkrishna M. Singre and (3) Shrikrishna M. Singre and all of them are assessed in the status of "individual". The assessment year involved is 1973-74, the corresponding previous year being the year ended on November 5, 1972. All of them are partners in a registered firm, namely, Bengal Coal Supplying Co. The said firm derives its income from sale and supply of coal. It also derives income from interest on Central Government securities and deposits, including deposits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for the assessment year under consideration. Hence, this reference under section 256(1) of the Act at the instance of the Revenue. Mr. G. S. Jetley, learned counsel for the Revenue, contended before us that the assessees are not entitled to any deduction under section 80L of the Act, because it is the firm which received interest on fixed deposits and not its partners. According to Mr. Jetley, what was received by the assessees was only a share of the income of the partnership firm. To put it differently, the submission of learned counsel is that the character of the income in the hands of the firm underwent a change on its apportionment in the hands of the partners and lost the character of "interest on Government securities and fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above question is evident from sub-section (2) of section 67 of the Act, which provides: "The share of a partner in the income or loss of the firm, as computed under sub-section (1) shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the firm has been determined under each head of income. " This sub-section clearly provides that a partner's share in the income or losses of the firm shall be apportioned in the assessment of the partner under various heads of income in the same manner in which the firm's income has been determined under each head. That being so, interest earned by the firm on Government securities and fixed deposits with banking compa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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