Business expenditure for interest on minors' gifts was upheld where the Tribunal found the funds were used for the firm's business.

Interest paid to minors on gifts credited by partners through mere book entries was treated as business expenditure because the Tribunal found, on the facts, that the funds were used by the firm for its business and that the interest was incurred for business purposes. That factual finding supported allowance under section 37(1) of the Income-tax Act, 1961, and no referable question of law was considered to arise on the record.

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Issues: Whether the interest paid by the assessee to minors on gifts made by partners by mere book entries was allowable as business expenditure under section 37(1) of the Income-tax Act, 1961, and whether any question of law arose for reference.

Analysis: The Tribunal had found on the facts that the amount was used by the firm for its business and that the interest represented expenditure incurred for the purposes of business. That finding was treated as a finding of fact. On that basis, the allowance of the expenditure under section 37 was upheld, and no referable question of law was seen to arise.

Conclusion: The application for reference was dismissed.

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