SHORI LAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, following question of law has been referred by the Tribunal, Amritsar Bench, Amritsar, for the opinion of this Court :

(2.) FOR the asst. yr. 1981-82, assesse was assessed in the status of individual. He is a partner of M/s Chaman Silk Mills, Amritsar and a major part of his income is derived from his share in the profit of M/s Chaman Silk Mills. His share of income as partner for the asst. yr. 1981-82 came to Rs. 22,791. Assessee claimed deduction of Rs. 3,600 for "expenditure under S. 37 incurred during the performance of duties and obligations as a partner'. ITO issued notice under S. 143(2) of the IT Act, 1961 (hereinafter referred to as the Act). In pursuance to the aforesaid notice assessee furnished further information vide his letter dt. 24th Jan., 1983. It was stated therein that assessee had claimed the deduction under S. 37 for the performance of his duties and obligations as a partner in the firm M/s Chaman Silk Mills and that the expenditure relating to rickshaw and travelling which comes to Rs. 10 per day for the performance of his duties. It was further pointed out that in the preceding two years similar deduction had been allowed. ITO rejected the claim of the assessee by observing that nature of duties and obligations had not been explained by the assessee and all the expenditure had already been claimed in the return of the firm. His conclusion was that the nature of expenditure claimed having not been explained it was not allowable. Assessee filed an appeal before the AAC and explained before him that the expenses had been claimed as travelling expenses pertaining to rickshaw charges for going to the premises of the firm for watching his interest in the firm's business. Total expenses claimed by the petitioner is to the tune of Rs. 3,600 at the rate of Rs. 10 per day on estimate basis. AAC after hearing the assessee allowed the expenditure to the extent of Rs. 1,000. Claim regarding the remaining amount of Rs. 2,600 was rejected. It was held that expenditure could not be allowed for all the days of the year as the partner may not have gone to the firm's premises on some of the days during the year. Assessee filed further appeal before the Tribunal. Tribunal upheld the order passed by the AAC and dismissed the appeal. While dismissing the appeal it was observed by the Tribunal that the expenditure incurred on going to the place of business and coming back from there could not be said to be expenditure incurred for the purpose of earning business income.