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TMI Blog1991 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... n which he was a partner should be allowed as a deduction from the income of the assessee as his business expenditure ?" The question is not happily worded. The expression "but was given user by the firm in which he was a partner" does not appear to be appropriate. The proper expression should have been "but used by the firm in which he was a partner". However, as there is no ambiguity about the controversy for determination, we do not propose to reframe the question. The assessee is a Hindu undivided family. The relevant assessment year is 1977-78. During this year, the assessee had income from various sources including business income assessable under the head "Profits and gains of business". Such business income was by way of share o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of its business was a business asset of the assessee and, as such, the interest paid for obtaining the loan to renovate the building was allowable as deduction from the business income of the assessee. Aggrieved by the decision of the Tribunal allowing the claim of the assessee for deduction of Rs. 5,658, the Revenue applied under section 256(1) of the Income-tax Act, 1961 ("the Act"), before the Tribunal for reference of the aforesaid question to this court for its opinion. Accordingly, this reference has been made to us. We have heard Mr. D. K. Talukdar, learned counsel for the Revenue, who submits that the shop in question not being used by the assessee himself but being allowed to be used by the firm in which the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prietary business of its own, it would have been entitled to get deduction in respect of the interest paid on money borrowed for renovating the building from its business income. The only controversy is whether it would be disentitled to get the deduction if it is used not for a proprietary business, but for the business of a firm in which it also had a share. There is no dispute that the business of the partnership was also the business of the assessee except with the difference that it was not exclusively its own and was carried on in partnership with some others. The asset in question was used for such business. The assessee derived income from the business run in partnership. It contributed capital for the business of the firm. Besides, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the partner for the business of the firm would also be expenditure incurred by him for the purpose of business and shall be allowable as a deduction in the computation of his income from business including his share income from the firm. It may also be observed that the interest paid being an expenditure, and expended by the assessee wholly and exclusively for the purpose of the business as indicated above, it shall also be allowable as a deduction from the income chargeable under the head "Profits and gains of business or profession" as, under section 37 of the Act, which is the residuary section, even if it is held that the amount borrowed in the instant case does not strictly fall under section 36(1)(iii) on the ground that the money ..... X X X X Extracts X X X X X X X X Extracts X X X X
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