9911796707
TMI Blog1982 (4) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... has its head office at Sirhind and branch office at Sadhugarh. This partner resides at Sirhind. In all, there are three partners. When the firm was constituted, he did not own a car. It is common ground that in the instrument evidencing the partnership under the name and style of 'Sood Bhandri Co.', there was no stipulation as to the expenditure to be paid to this partner with regard to the business of the firm that he may help to carry on. The business of the firm is that of commission agents because its income is from kachi arhat and also from dealings in grains, etc. For the assessment year under appeal, the share of the assessee from the firm was Rs. 24,769. The assessee had purchased a car during the previous year relevant to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee relied on the judgment of the Gujarat High Court in the case of Matubai Chunilal Patel v. CIT [1967] 66 ITR 408 to emphasize the contention that the claim of the assessee, a partner in a firm, to deduct half of the motor expenses, including depreciation, from his share income from the partnership, on the ground that it related to his carrying on the business, was allowed by the Hon'ble High Court, on a reference, by holding that, on the facts and in circumstances of the case, the assessee had incurred this expenditure wholly and exclusively for purposes of the business of the firm and, therefore, the amount was deductible from his share income. 5. Realising that the judgment of the Hon'ble Supreme Court in the case of Ramn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the rival submissions, the order of the authorities below and on perusal of the judgments cited, it is clear that the claim of the assessee is admissible. The Supreme Court in the case of Ramniklal Kothari has laid down a general proposition that the 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 purposes of section 10(1) of the 1922 Act and being business income, expenditure necessary for purposes of earning that income and appropriate allowances are deductible therefrom in determining the taxable income of the partners. Taking into consideration the general proposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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