TMI Blog2001 (2) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) reduced the said disallowance to Rs. 5,000. On the facts of the case, we uphold the order of the CIT(A). 3. The AO also disallowed an amount of Rs. 8,000 out of telephone charges claimed at Tinsukia and Rs. 6,000 out of similar telephone charges claimed at Calcutta on the ground of personal user of the telephone. The CIT(A) allowed relief of Rs. 3,000 out of each of the expenses items. Although he states that he restricted the disallowance in respect of the telephone charges at Calcutta of Rs. 5,000 actually, however, sustenance of that expenses appears to have been made Rs. 5,000 only. Looking into the facts of the case, we uphold the order of the CIT(A). 4. Disallowance of an amount of Rs. 4,000 was also made out of car running ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the partnership concern, the AO discusses cl. 5 of the partnership deed in accordance with which all the assets and liabilities of the said business excluding, however, the trade mark and patent right, were transferred to the new firm. The AO, however, discusses in this connection that as the patent right was an integral part of the manufacturing process of Biri, the said patent right must be considered to have automatically been transferred by Shri Nani Gopal Paul to the assessee-firm. The AO, thus, ultimately came to the conclusion that as per the real intent of the partnership deed even the trade mark and the patent right should also be considered as having been transferred by Shir Nani Gopal Paul to his new firm and, therefore, the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nani Gopal Paul. In this connection, the learned counsel for the assessee firstly relies on the discussions made by the Hon ble Calcutta High Court at p. 756 of the reported judgment in the case of Narayan Prasad Vijaivargiya vs. CIT (1976) 102 ITR 748 (Cal) to the effect that a deed is required to be read and construed as a whole and, if possible, effect should be given to all parts thereof. The partnership deed clearly mentions not only the exclusion in respect of trade mark and copyright out of transfer of assets of the erstwhile proprietary business (cl. 5 of the partnership deed) but also the requirement of payment of royalty by the partnership firm to Shri Nani Gopal Paul at the rate of Rs. 5,000 per month for the user of the trade m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm to use the same, for which he was entitled to royalty at the rate of Rs. 5,000 per month. The Department does not challenge the reasonableness of the quantum of payment in this regard by resorting to the provisions of s. 40A(2) or otherwise. Since the property in the patent right and the trade mark remained with Shri Nani Gopal Paul, the payment of royalty to him for the user of the said patent right and trade name by the assessee-firm, has got to be considered as a deductible business expense in the hands of the partnership firm. We, therefore, reverse the order of the lower authorities and delete the disallowance of the claim of Rs. 60,000 in this regard. 7. Although the Department has not raised any specific ground in this regard, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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