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TMI Blog1967 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... 961. The assessee derived income from various sources, viz., interest on securities, dividends and share of profits of two partnership firms. These two firms were M/s. Dhirajlal Khushaldas Brothers and Dhirajlal Chunilal Co. We are concerned in the present reference with the firm of M/s. Dhirajlal Khushaldas Bros. The assessee owned a car and in his individual assessment he claimed 50% of his running expenses and 50% of the depreciation, aggregating to Rs. 6,024, as deductible expenditure contending that the motor-car was used by him for the discharge of his duties as a partner in the partnership concern of M/s. Dhirajlal Khushaldas Bros. This claim of Rs. 6,024 was disallowed by the Income-tax Officer, firstly, on the ground that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been claimed by the firm. Thereafter, at the instance of the assessee, the following question has been referred by the Tribunal to this court under section 256(1) of the Act, viz. : " Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 6,024 incurred by the assessee on a car which was used by him for the business of the firm is an allowable deduction against the assessee's share income from the firm of M/s. Dhirajlal Khushaldas Bros. ? " Under clause 7 of the partnership deed, dated October 15, 1954, of the partnership firm of M/s. Dhirajlal Khushaldas Bros., it has been provided that the firm was to be conducted under the sole supervision and guidance of M/s. Chunilal Khushaldas Patel and/or Matubh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, any expenditure not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head " Profits and gains of business or profession ". This provision in the Act of 1961 is the same as the provision set out in section 10(2)(xv) of the Act of 1922, and the decisions on section 10(2)(xv) of the 1922 Act have a direct bearing on the interpretation of section 37(1) of the Act. It was contended before us on behalf of the revenue that the expenses in connection with the motor-car amounting to Rs. 6, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst his total income, the burden must be discharged by him by leading appropriate evidence in each case and he must show that the amount which he has claimed as deduction against his business income has been expended by him wholly and exclusively for the purposes of the business. It was contended before us on behalf of the revenue that there was no finding of fact by any of the authorities that Rs. 6,024 were expended for the purposes of the business. It is true, according to this contention on behalf of the revenue, that the amount of Rs. 12,048 represented the expenses incurred by the assessee in connection with the car inclusive of depreciation and it was also found that the car had been used by the assessee for the purposes of the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial man would not incur the expenditure himself if it is for the business of the firm and he would rather have the amounts debited in the accounts of the firm rather than going on spending the money himself. The question whether in a particular firm the amounts of expenses incurred by the partner for the business of the firm are debited to the accounts of the firm or are ultimately claimed by the partner in his own assessment is a question of arrangement between the partners inter se ; but the question that has to be decided is whether the amount expended by a partner for the business of the firm can be claimed as a deduction against his share of profits from that particular partnership firm. In Commissioner of Income-tax v. New Digvijay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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