52.
| (1) Where a trade, business, profession, vocation, or employment is carried on by two or more persons in partnership, the provisions of the following subsections shall apply. |
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| (2) An Assessor may give notice in writing to the precedent partner of the partnership requiring him to furnish within the time specified in such notice a return showing the profits or losses of the partnership from such trade, business, profession, vocation, or employment during the period of twelve months immediately preceding the year of assessment or during any other period in respect of which statutory income may be computed under section 12, ascertained in accordance with the provisions of this Act relating to the ascertainment of profits and income of a person, and showing also any interest, annuity, ground rent, or royalty payable by the partnership in respect of such trade, business, profession, vocation, or employment for the said period. The amount of such interest, annuity, ground rent, or royalty (except where it is payable by a person out of Ceylon to another person out of Ceylon) shall be deducted from the profits or added to the losses ascertained as above, and the figure thus arrived at shall be known as the divisible profit or loss for that period. The precedent partner shall further in such return declare any other income of the partnership for the said period together with the names and addresses of all the partners, and shall apportion among them the whole of the divisible profit or loss and other income in accordance with their shares in the partnership during the period in which the said profit or loss or income arose. |
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| (3) In computing the profits or losses of the partner ship, nothing shall be deducted for salaries or other remuneration of partners or for interest on partners' capital, but such sums shall be taken into account in apportioning among the partners the divisible profit or loss and other income. |
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| (4) The statutory income of any partner from the partnership shall be computed in accordance with the provisions of section 12 by treating his share of the divisible profit of the partnership as though it were profits of a trade, business, profession, vocation, or employment carried on or exercised by him, and his share of other income as though it accrued to him solely: |
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| (5) The share of any partner of a divisible loss shall be a loss incurred by him within the meaning of section 15. The amount of such divisible loss and the partner's share thereof shall be determined by the Assessor and such determination may be questioned in an appeal against an assessment in accordance with the provisions of Chapter XII. |
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| (6) Where a return has been made by the precedent partner in accordance with subsection (2) and has been accepted by the Assessor, the income of each partner resident in Ceylon derived from the partnership shall be assessed upon him individually. |
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| (7) The income of any non-resident partner or partners from the partnership shall be assessable in the name of the partnership or of any resident partner or of any agent of the partnership in Ceylon, and the income tax charged thereon shall be recoverable by all means provided in this Act out of the assets of the partnership, or from any partner, or from any such agent. |
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| (8) Where no return has been made in accordance with subsection (2) or the return has not been accepted by the Assessor, either as regards the amount of the profits or income or the allocation thereof among the partners, it shall be lawful for an assessment to be made in the name of the partnership on the estimated amount of the profits and income of the partnership arrived at in accordance with the provisions of this Act relating to the ascertainment of the assessable income of a person, and income tax thereon may be charged at such rate or rates as may be specified in that behalf in the First Schedule to this Act, and shall be recoverable out of the assets of the partnership, or from any partner, or from any agent of the partnership; such assessment shall be subject to appeal by any person aggrieved thereby in the manner provided by Chapter XII, and the Commissioner or the Board of Review, as the case may be, may upon such appeal determine the profits and income and allocate the same among the partners and compute their statutory incomes from the partnership as provided in subsection (4) and the income tax payable in respect thereof, which may be reassessed on the individual partners or may be recovered as tax on the assessment appealed against without any new assessment. |
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| (9) Where under this section income has been assessed in the name of a partnership, and a change occurs in such partnership by reason of the retirement or death, or the dissolution of the partnership as to one or more of the partners, or the admission of a new partner, in such circumstances that one or more of the persons who were joint owners of the assets of such partnership continues or continue to be owner or joint owners of such assets, the person or partnership becoming owner of such assets in consequence of such charge shall be charged with income tax or any part of it which remains unpaid and the provisions of Chapter XIV shall apply to such person or partnership accordingly. |
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Sri Lanka Consolidated Acts