Business deduction for protective salary payments upheld where employee safeguarded partner's income interest during dissolution disputes.

Salary paid to an employee engaged to protect an assessee's interest in partnership firms under dissolution was treated as a business expense incurred to safeguard an income-producing interest. As the assessee was a partner in both firms and the appointment was found justified on the facts, the expenditure was held to be laid out for the protection of her business and income interests. The salary payment was therefore allowable as a deduction.

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Issues: Whether the payment of salary to an employee engaged to protect the assessee's interest in two partnership firms under dissolution was allowable as a business deduction.

Analysis: The assessee was a partner in the two firms and derived income from them. The payment was made to a person appointed to safeguard her interests during the dissolution disputes. On the facts, the appointment was treated as justified and the expenditure as incurred for protecting the assessee's income-producing interest. Reliance was placed on the Supreme Court decision referred to in the order.

Conclusion: The salary payment of Rs. 3,768 was held allowable as a deduction.

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