Govindan Nair, J.
1. This is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the department. The question referred is in these terms :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in law in directing that export profit rebate has to be allowed to the assessee-firm also in addition to that allowed to the partners ?'
2. The year of assessment is 1963-64 and the accounting period is that which ended on March 31, 1963. The export profit rebate is allowable under Clause (i) of Sub-section (5) of Section 2 of the Finance Act, 1963. That clause runs as follows :
' (5) In respect of any assessment for the assessment year commencing on the 1st day of April, 1963- (i) an assessee being an Indian company or any other company which has made the prescribed arrangements for the declaration and payment of dividends within India or an assessee (other than a company) whose total income includes any profits and gains derived from the export of any goods or merchandise out of India, shall be entitled to a deduction, from the amount of income-tax and super-tax with which he is chargeable of an amount equal to the income-tax and super-tax calculated respectively at one-tenth of the average rate of income-tax and of the average rate of super-tax on the amount of such profits and gains included in the total income;...'
3. It is not disputed that the income of the assessee, a registered firm, included profits and gains derived from the export of goods out of India. The Income-tax Appellate Tribunal allowed the deductions under the above section. One would have expected that there could be no controversy on such deduction being allowed. But, apparently, complications have arisen because of the fact that the partners when they were assessed were also given the benefit of the section by giving them the deductions that could be allowed in relation to their share of income which apparently included profits and gains from export of goods. Further complications arose because of the stand taken by the assessee before the Income-tax Officer that if the deductions under the section are permissible only once, the deductions may be allowed from the tax payable by the partners on their assessments. So, the arguments before the Tribunal turned on the question whether both the partners as well as the firm are entitled to the deductions under the section. The Tribunal took the view that the registered firm, the assessee, as well as the partners of the firm are entitled to the benefit of Section 2(5)(i) of the Finance Act, 1963. They relied on the view expressed by the Gujarat High Court in the decision in Commissioner of Income-tax v. Arun Industries,  61 I.T.R. 241 (Guj.). The question that arose for decision therein was whether the registered firm was entitled to the benefit of Section 15C of the Indian Income-tax Act, 1922, when the partners had already been given the benefit of that section in their assessments. The court came to the conclusion that both the firm and the partners are entitled, to the benefit of Section 15C in their respective assessments. It seems to have been assumed in that case that the share income of the partners determined under Section 23(5)(a)(i) of the Indian Income-tax Act, 1922, also included the profits or gains derived from a new industrial undertaking relating to which Section 15C of that Act applied. It is doubtful whether this assumption is correct, for, once the deduction from the total income of the firm of the profits and gains from the new undertaking had been made as required by Section 15C and thereafter the net income of the firm is divided among the partners, the share of the income of any partner may not include the profits and gains of the new undertaking which has to be deducted. If this is so, the partners may not be entitled again to claim deduction under Section 15C in their assessments. This question, however, does not arise before us and we, therefore, express no opinion on it.
4. We, however, feel that so far as the application of Clause (i) of Subsection (5) of Section 2 of the Finance Act, 1963, is concerned, there cannot be any doubt that the firm as well as the partners of the firm will be, entitled to the benefit of the section. After the amendment to the Indian Income-tax Act, 1922, individual partners as well as the firm, though registered, are separately assessable. On a plain reading of the section of the Finance Act, there can be no doubt that the registered firm is entitled to the benefit of the section. The doubt, as we said earlier, has arisen as a result of the benefit having been conferred on the partners of the registered firm. The benefit conferred by the section is the deduction from the tax computed after the determination of the total income. The total income so determined will have to be divided among the partners according to the proportion in which profits are to be shared by the members of the firm. So the share of the partner will include the profits or gains from export. According to the wording of the section, if the income of an assessee inchid-ed the profits and gains from export, the assessee is entitled to the deduction provided by the section. Counsel on behalf of the revenue suggested that the share income of a partner of a firm that was doing export business cannot include profits or gains from export because the export had been done by the firm and the sharing of the income is thereafter. We are unable to accept this argument. The question is about the nature of the income. The section does not say that the income must be derived by the assessee exporting the goods. In the case of a firm, it is a legal entity for the income-tax purposes and it may be said that the firm exported the goods but in law it will be an export by the partners of the firm because the firm is not recognised for all purposes as a separate legal entity. There can be no doubt, therefore, that if the total income of the firm which included profits and gains from export are divided among the partners, the shares of the partners will contain an element of profits and gains of export. To that extent they too will be entitled to the benefit of the section.
5. Reference was made by counsel for the revenue to the decisions in Mohan Lal Hira Lal v. Commissioner of Income-tax,  11 I.T.R.259 (Nag.) and Commissioner of Income-tax v. Valiram Bherumal,  14 I.T.R. 407 (Sind.) These decisions were concerned with the question about the deductions to be made from the income under the 3rd proviso to Section 4(1) of the Indian Income-tax Act, 1922. This was a deduction to be made in computing the income and the benefit being given in relation to the whole income of the firm, there was no scope for again allowing the deduction under the section when the partners were assessed. The deduction contemplated by Section 2(5)(i) of the Finance Act, 1963, is not for the income but a relief given to an assessee from the tax imposable on him.
6. The question referred to us has to be answered in the affirmative, that is, against the department and in favour of the assessee. We make no order as to costs.
7. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.