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2017 (5) TMI 1416 - ITAT HYDERABADInterest income as a member of the AOP - Method of computing a member’s share in income of association of persons or body of individuals - Held that:- As per section 67A, the total income of the AOP from all the heads of income should be computed and, then, any salary, interest, bonus, commission or remuneration paid to member of the AOP shall be deducted from the total income of the AOP. Balance, if any, should be apportioned in the hands of members of the AOP in proportionate to their share holding ratio in the AOP. The share of profit or loss and the salary, remuneration, interest etc. paid to the member of the AOP constitute the share income of the member which should be brought to tax in the hands of the assessee since the shares of the AOP are determinate. In the instant case assessee is member of AOP and received interest as member of the AOP, hence as per section 67A, the income has to be computed in the hands of AOP and the share income has to be brought to tax in the hands of member of AOP. This issue has not been considered by this AO or CIT(A). Therefore, we are of the considered opinion that the issue should be remitted back to the file of the AO to consider taxing the share income of the assessee as per the provisions of section IT Act. This view is supported by the Hon’ble MP High Court decision in the case of CIT Vs. D&H Secheron Electrodes Ltd. [2005 (1) TMI 92 - MADHYA PRADESH High Court]. Accordingly, we set aside the issue in dispute to the file of the AO with a direction to compute the income of the AOP and the share income of the AOP in the hands of the Members of AOP i.e. assessee. Accordingly, the additional ground raised by the assessee is allowed for statistical purposes.
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