MOOL CHAND C Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) ON the application of the assessee under s. 82, Hyderabad IT Act, 8 of 1357 F., the Tribunal at Bombay has referred the following question for determination of this High Court, viz.,

(2.) FROM the statement of the case forwarded to this Court by the Tribunal it appears that the assessee was assessed as an individual on his total income which, inter alia, consisted of a share of income from the firm of Mohammed Haneef and Abdul Qadar and others, in which the assessee had one - sixth share. This one -sixth was computed at Rs. 25,609. The assessee claimed that in computing the total income, he should not only be allowed to deduct the interest paid on the capital borrowed by him for investment in the partnership but also the amount of commission which he had to pay to one Mohamed Yakoob through whose good offices he procured the loan as an item of expense deductible under s. 12 of the Hyderabad IT Act, corresponding to s. 10 of the Indian IT Act.

(3.) THE ITO disallowed this contention, but the AAC allowed a sum of Rs. 5,000 towards the interest and a sum of Rs. 5,029 paid to Mohd. Yakoob. In an appeal filed by the Department against this order, the Tribunal, without going into the merits of the case, viz., whether the amount claimed by the assessee was valid or not, held that on a reading of s. 21(b), 31(5) and 31(6), the whole share of the partnership income of Rs. 25,609 is taxable without making any deduction either towards interest or towards commission paid by the assessee.