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TMI Blog1995 (3) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, from the firm the assessee received share of profits which is the larger in amount than the amount of loss in proprietary concern. Therefore, the resultant income is positive. The assessee made deposit under section 32AB and claimed deduction. This was rejected by the tax authorities on the basis that there is no positive income under the head 'Business of proprietary concern'. The share of profit from the firm could not be considered for the purpose of claim. The fact that the firm had not claimed any deduction under section 32AB was irrelevant. Aggrieved, the assessee is before us. 3. The representatives of both the sides were heard. 4. In our opinion, the claim of the assessee cannot be accepted. The Finance Act, 1986 intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2 Now, the provisions of section 32AB as they stood initially, it was found, could conceivably lead to an interpretation that the deduction could be claimed in the case of a firm as also/or in the case of a partner in respect of the income derived from the business carried on by the firm. Since this was not the intention it was sought to be clarified by Finance Act, 1987 that deduction under section 32AB shall be allowed only in the assessment of the firm and not in the hands of the partner in respect of the income derived from the business of the firm. This is evident from the notes on clauses to the Finance Bill, 1987 at 165 ITR at page 124 and page 152 (Statute). But while making appropriate amendment to clarify the actual amendment wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o inserted by way of amendment clearly mentions that the deduction shall not be allowed in the computation of the income of any partner and if read in the context of notes and clauses for the purpose of bringing the amendment, it is quite clear to us that no such deduction is intended by the Legislature qua the share of profit derived by a partner of a registered firm. By inserting the proviso the Legislature has excluded the share of profits from the registered firm for the purpose of computing the profits to find out the quantum deduction up to 20 per cent stated in sub-clause (ii) of clause (b) of sub-section (1) of section 32AB. We, therefore, uphold the appellate order. 6. In the result, the appeal is dismissed - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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