Law: Income Tax Act, 1922

Section: 24B

Section 159 of the Income-tax Act, 1961 [Corresponding to section 24B of the Indian Income-tax Act, 1922] - Legal representatives - Assessment year 1958-59 and 1959-60 - Assessee who was partner in firm of solicitors died on 16-11-1956 - One of partners had been appointed administrator to his state under a will left by him - In accordance with terms of partnership deed, administrator received part of profits - ITO assessed said profits - Whether since no part of either of these amounts was received by estate during year of account in which assessee died, there could not be an assessment in respect of these amounts on estate of deceased represented by administrator - Held, yes FACTS The assessee was a partner in a firm of solicitors. The deed of partnership provided that it was to enure for a minimum period of three years from 1-4-1956. Subsequently, 'M' died on 16-11-1956. One of the other partners had been appointed administrator to his estate under a will left by him. In accordance with the terms of partnership deed, the profits during the period of 182 days became payable. During the period 1-4-1957 to 31-3-1958, the total amount of profit to which the deceased partner became entitled was computed as Rs. 53,553 and for the period 1-4-1958 to 31-3-1959, such profit worked out to Rs. 12,250. The ITO made assessment in respect of the incomes for the two assessment year and such assessment were made on the assessee described as, 'The Estate of the assessee by Administrator....'. On appeal, the administrator contended that no assessment could be made on the estate of the deceased in respect of professional income received after the death of the deceased. The AAC rejected the administrator's contention and upheld the order of the ITO. On further appeal, the Tribunal, observed that no doubt, the amount was calculated with reference to the profits actually drawn in the immediately preceding year. But it was clearly payable only after death and that too to the estate of the deceased by way of perhaps goodwill. The payment in no sense could constitute income and much less income of the deceased from legal profession. On reference : HELD It would be noticed that clause…

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