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TMI Blog1966 (9) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... w referred for the opinion of this court is: Whether, on the facts and in the circumstances of the case, the sum of ₹ 2,400 formed part of the assessee's income? The assessee in this case is a firm of partners. The partners in question are the partners of two different firms. One of the partnerships consisted of five partners, namely, the existing four partners and their late f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eased father, Rao Sahib B. Munivenkatappa, dated 14th May, 1958, the partners shall pay to their sister, Shrimati B.M. Sharadamma, for her lifetime only a sum of ₹ 200 monthly. This amount shall be a charge on the assets of the partnership. It may be noted that the bequest under the will referred to earlier was subject to the payment to be made to Sharadamma. The same was evidently acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in every case, but it is the nature of the obligation which is the decisive fact. There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. Where, by the obligation, income is diverted before it reaches the assessee, it is deductible; but, where the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, even before the income of the partnership reached the hands of the assessee, the payment to Sharadamma had to be deducted. It is only the balance that could be considered as the income of the partnership. This is not a case where the payment to Sharadamma was to be made from out of the income of the assessees. The facts of the present case fall within the rule laid down by the Judicial Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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