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TMI Blog1979 (1) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,000 and disallowed the balance stating that no evidence was produced to show that the expenses were incurred for earning the share income. 2. In appeal, the AAC while holding that in principle motor car expenses would be admissible against the share income of it was incurred for the purposes of business, came to the conclusion that only a further amount of Rs. 500 should be allowed since expenditure for going to the place of business and residence and vice versa would not be an admissible deduction. 3. In appeal, the learned counsel for the assessee submitted that the assessee had claimed only 3/4th of the total expenditure and hence there was no warrant for the AAC making a further purported disallowance for inadmissible expenses of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s branches were located at places of some distance. By effective supervising the conduct of the business of the firm the assessee ensures that the firm makes maximum profit and consequently the assessee gets the maximum share income possible. The Supreme Court in the case of CIT vs. Ramniklal Kothari(2), after considering the earlier decision of the Court in the case of Jitmal Bhuramal vs. CIT(3), which was also one of the decisions considered by the Madras High Court in the case of Basantlal Gupta vs. CIT(1) relied on by the learned Departmental Representative, laid down the following principles ; "Where a person carries on business by himself or in partnership with others, profits and gains earned by him are income liable to be taxed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the partner; and s. 16 (1) (b) requires that salary, interest, commission or other remuneration payable by the firm besides the share in the balance of profit is to be taken into account in determining the total income. But it is not thereby implied that expenditure properly allowable in earning the profits, salary, interest, commission or other remuneration is not to be allowed in determining the taxable total income of the partner. The receipt by the partner is business income for the purpose of s. 10(1), and that being business income expenditure necessary for the purpose of earning that income and appropriate allowances are deductible therefrom in determining the taxable income of the partner". Looking to the aforesaid observations an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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