| Case ID |
2e657bac-d942-45dc-b5d3-bd277808af74 |
| Body |
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| Case Number |
Civil Appeals Nos. 575 and 576 of 1966 |
| Decision Date |
Mar 07, 1969 |
| Hearing Date |
|
| Decision |
The Supreme Court upheld the decision of the Tribunal, confirming that the share of profits received by a partner from a firm is regarded as business income and is subject to taxation under the relevant provisions of the Income Tax Act, 1922. The Court emphasized that expenses incurred for earning that income are deductible when computing the taxable income of the partner. The case clarified the treatment of income received from partnerships, affirming that partners are entitled to claim deductions for necessary expenses incurred in the course of earning their share of profits. The appeal by the Commissioner of Income-tax was dismissed, reaffirming the legal principles established in previous judgments regarding the treatment of partner income and deductions. |
| Summary |
This case revolves around the interpretation of the Income Tax Act, 1922, particularly concerning the taxation of income received by partners in a business. The Supreme Court of India addressed the question of whether a partner's share of profits, along with the expenses incurred to earn that income, can be claimed as deductions in calculating taxable income. The ruling stated that income from partnerships is taxable as business income, allowing partners to deduct expenses directly related to earning that income. This landmark decision is crucial for tax law, clarifying the rights of partners regarding income taxation and deductions. Keywords include 'Income Tax Act', 'business income', 'tax deductions', 'partner income', and 'Supreme Court rulings'. |
| Court |
Supreme Court of India
|
| Entities Involved |
Not available
|
| Judges |
J. C. SHAH,
A. N. GROVER
|
| Lawyers |
D. Narasaraju, Senior Advocate,
S. K. Aiyar, Advocate,
R. N. Sachthey, Advocate,
B. D. Sharma, Advocate,
M. C. Chagla, Senior Advocate,
U. P. Singh, Advocate
|
| Petitioners |
COMMISSIONER OF Income tax, BIHAR
|
| Respondents |
RAMNIKLAL KOTHARI
|
| Citations |
1974 SLD 335,
(1974) 30 TAX 58,
(1969) 74 ITR 57,
1973 PTD 74
|
| Other Citations |
Ishwardas Subhkara v. CIT [Income-tax Reference No. 38 of 1952 decided on June 2, 1953],
CIT v. Ramnik Lal Kothari [1964] 54 ITR 232,
Shantikumar Narottam Morarji v. CIT [1955] 27 ITR 69,
Basantlal Gupta v. CIT [1963] 50 ITR 541,
Jitmal Bhuramal v. CIT [1959] 37 ITR 528 (Pat.),
Jitmal Bhuramal v. CIT [1962] 44 ITR 887 (SC)
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
10(2),
66(1),
10,
23(5)(a)(ii),
16(1)(b)
|