1971 (7) TMI 17

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....n the business is an admissible deduction ? " The material facts are as follows : The assessee, Jabarmal Dugar, who is an individual, derives income from various sources. He has a proprietary business in money-lending at Sardarshahr in the name of self and is also a partner in the firm, M/s. Chatiskukh Sampatram, Calcutta, the share from which forms the major part of the asseesee's income. He maintains two sets of accounts for his business. In one of the sets of account books in the name of M/s. Sampatram Budhmal, his gross receipts were only Rs. 337 and the business expenses were shown as Rs. 2,440. In connection with his claim for the deduction of the amount of Rs. 2,440, the Income-tax Officer, " A " Ward, Bikaner, vide his order d....

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....om share of profit in the firm was his income from business carried on by him and that the salaries paid to the accountant and the correspondence clerk were expended wholly and exclusively for the purpose of the business and were admissible deductions under section 37(1) of the Income-tax Act. The Appellate Tribunal, therefore, dismissed the appeal. On an application by the Commissioner of Income-tax, the Tribunal drew up the statement of the case and referred the above-quoted question of law for answer. We have heard Mr. S. K. Mal Lodha for the department and Shri S. C. Bhandari for the assessee. We may at once observe that under the Income-tax Act of 1922 (hereinafter referred to as " the Act of 1922 "), it was settled by a number o....

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....id down by the Privy Council in Commissioner of Income-tax v. S. M. Chitnavis. The following three cases were also noticed by the court in support of its conclusions: Shantikumar Narottam Morarji v. Commissioner of Income-tax, Commissioner of Income-tax v. New Digvijaysinhji Tin Factory and Jitmal Bhuramal v. Commissioner of Income-tax. Indeed, counsel for the department did not join in any serious controversy as regards the position of law under the Act of 1922, and we, therefore, consider it unnecessary to notice the other cases. The department's contention, however, is that the position of law must be deemed to have been changed under the new Act and in this connection reliance was placed upon the language of section 67(3) of the I....