9911796707
TMI Blog1988 (11) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... undivided family. The said firm owned a factory, land and buildings which had been leased out to a company. The assessee's share of interest in the immovable properties of the firm in which the assessee was a partner was brought to additional wealthtax. The assessee contested the levy of additional wealth-tax on these properties on the ground that these properties were used for the purpose of the business of the firm of which he was a partner and was, therefore, not liable. The Revenue took the stand that since the firm was using the said assets for its business and the assets were not used by the assessee, it was not entitled for exclusion from the operation of item (2) of Part I of Para A of the Schedule to the Wealth-tax Act, 1957 (herei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be deemed to be an urban asset and the provisions of item (2) of Paragraph A shall apply accordingly. Explanation. -The extent of the interest of the assessee in a firm or association deemed to be an urban asset as aforesaid shall be a sum which bears to the value of the whole of the Interest of the assessee in the firm or association the same proportion which the net value of the urban assets of the firm or association (determined under rule 2 as if they were urban assets belonging to an individual or a Hindu undivided family) bears to the net wealth of the firm or, as the case may be, the association, computed as if such firm or association were an individual . . . " On appeal to the Appellate Assistant Commissioner, the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be by its actual occupation. It was contended on behalf of the assessee that the language of section 22 of the Income-tax Act and the provisions with which we are concerned are entirely different. Under section 22 of the Income-tax Act, income from house property is brought to tax in respect of the immovable property other than such portions in the property as the assessee may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to tax. Whereas the charge under item (2) of Part I of Para of the Schedule to the Act is not attracted to "business premises" as defined therein, and the "business premises" means an immovable property owned by the assessee and used throughout for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id provision of the Income-tax Act must be examined in two facets : (i) Whether the property is occupied by the assessee for the purpose of his business ; and (ii) whether the profits of such business are assessable to tax in his assessment. On the first aspect, this court held that the general law of partnership that a firm is nothing but a compendious expression for all the partners and, therefore, the business carried on by the firm is business carried on by the partners. However, the court took the view that the occupation of the property in the context must mean "occupation as owner or his own occupation." The fact of occupation, therefore, must go with the owner of the building, which means actual occupation for the purpose of his bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll received as income from business carried on by him and that the share of the assessee from the profits of the firms was income from business carried on by the partner. Business carried on by a firm is business carried on by all the partners. Profits of the firm are profits earned by all the partners in carrying on the business. In the individual assessment of the partner, his share from the business income is liable to be taken into account under section 10(1). This is exactly what was held by this court in Guruswamy's case [1984] 146 ITR 34, when it agreed with the view of the Gujarat High Court in CIT v. Rasiklal Balabhai [1979] 119 ITR 303, that under the general law of partnership, "firm" is a compendious expression for all the partn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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