1981 (4) TMI 89

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..... n are these : The assessee is a HUF. The relevant year of assessment is 1975-76 with the previous year ending on March 31, 1975. The HUF represented by the karta was a partner of the firm, M/s. Setty Ramayya Patra Co. The firm received interest on bank deposits during the year and the assessee claimed relief under s. 80L of the Act in respect of the share in the interest received by the firm by way of exemption. The ITO disallowed the claim, but the AAC accepted the assessee's stand and directed that relief under s. 80L of the Act should be given to the assessee in respect of that portion of the bank interest which fell to his share. The revenue appealed to the Tribunal, but the decision of the AAC was upheld. The Tribunal took the view: .....

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..... he mere fact that the interest earned by the firm has been taken into account in the assessment made under the Income-tax Act in the case of the firm does not, in any way, alter its basic character. In other words, the interest from the bank received by the firm remains as such in the hands of the partners after apportionment. In this view of the matter, we agree with the finding of the Appellate Assistant Commissioner. It is significant to note that the language used in section 80L of the Act is 'any income by way of...'. The section does not say that the exemption is limited to any income received as interest on deposits made by the individual himself. Considering all the facts and circumstances of the case, we have no hesitation in uphol .....

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..... ious heads of income in the same manner in which income or loss of the firm has been determined under each head of income. " Strong reliance has been placed by the Tribunal and the assessee's counsel on this provision for the stand that when in the hands of the partner the various heads of income of the firm are to be apportioned, the benefit under s. 80L which relates to one of the heads being " Income from other sources", must be available. Admittedly, there is no direct decision on the point. Reliance has been placed by the assessee's counsel on a decision of the Gujarat High Court in the case of CIT v. Arun Industries [1966] 61 ITR 241 and a decision of the Allahabad High Court in the case of CIT v. Smt. Sakuntala Banerjee [1979] 120 .....

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