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TMI Blog1977 (11) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, Fort, Bombay. He claimed deduction of various items of expenditure against his share of the income from the partnership for the three material years. We are not concerned with the details of these expenses, but they pertain to expenses for the running of a motor car, depreciation on the car, entertainment of clients and other expenses. As far as the last mentioned item is concerned, it is indicated in the order of the Income-tax Appellate Tribunal in the appeal that they pertain to purchases of several books, periodicals and magazines in connection with his profession as an architect which the assessee studies at home and other expenses pertaining to the studio at home for drawing, designing and planning of jobs. The assessee's claims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came in appeal to the Tribunal for the assessment year 1961-62 and for the two remaining years the assessee came in appeal. The Tribunal agreed with the assessee that the allowances enumerated in sections 30 to 37 of the Income-tax Act, 1961, were not exhaustive and an item which was not deductible under section 67(3) of the Act may still be allowed as a deduction in the hands of the assessee. The Tribunal further found that the partners of Messrs. Gregson, Batley King had agreed amongst themselves to incur certain expenditure and these items of expenditure (indicated in paragraph 15 of the consolidated order of the Tribunal dated 22nd November, 1967, in the three appeals) pertain to the various items in respect of which deductions had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Kothari's case [1969] 74 ITR 57 (SC) reads as follows : "Business carried on by a firm is business carried on by the partners. Profits of the firm are profits earned by all the partners in carrying on the business. The share of the partner is business income in his hands for the purpose of section 10(1) of the Indian Income-tax Act, 1922, and, 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. Held, accordingly, that the respondent, who was a partner in four firms but did not carry on any independent business, was entitled to deduct from his share of the profits from the firms amounts paid as salary an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e position of the assessee is even stronger than decided by the Patna High Court and approved by the Supreme Court. It has been held that the expenses in respect of which deductions were claimed pertained to the profession of the assessee, viz., that of an architect. It was further found that the partners had agreed amongst themselves to incur certain expenditure and the amounts claimed were agreed to be borne by the partners themselves. If this is so, is the expenditure to be disallowed merely because it has not been brought to the accounts of the partnership ? Further, can it be properly regarded as not having been incurred for the purpose of earning the assessee's share of the profits of the firm? The partnership deed may provide that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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