COMMISSIONER OF INCOME TAX BIHAR Vs. RAMNIKLAL KOTHARI

JUDGEMENT

(1.) The respondent Ramniklal Kothari carried on business in diverse lines as a partner for four different firms. He received from time to time income from the different registered firms as his share of profits.

(2.) For the assessment year 1955-56 the respondent declared his share of profits from the four firms at Rs. 77,027 and he claimed an allowance of Rupees 13,283 being payment of salary and bonus to staff, expenses for maintenance and depreciation of motor-cars, travelling expenses and interests. The income-tax Officer, Hazaribagh, allowed the claim for interest as a permissible deduction and disallowed the rest. In the view of the Income-tax Officer since the respondent did not carry on any independent business, the amounts, except interest, were not claimable by the respondent on his own account, if at all, the amounts should have been claimed as business expenses incurred in the accounts of the four firms.

(3.) For the assessment year 1956-57 the respondent declared Rs. 53,540 as his share of the profits in the four firms and claimed an aggregate amount of Rs. 19,380 as admissible deduction on various grounds including Rs, 1,956 as interest paid by him. The Income-tax Officer allowed the claim for interest and disallowed the rest of the claim.