TMI Blog1973 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, Allahabad, has referred the following question for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the assessee was entitled to the deduction of interest and litigation expenses from the share of the profit derived by him from Niranjan Lal Bhargava Co.?" The assessment year involved is 1956-57, ofwhich the previous year is the calendar year ending on December 31, 1955. During the relevant previous year the assessee derived income under various heads including 6/16ths share in a registered firm of the name and style of M/s. Niranjan Lal Bhargava and Company. He claimed as deduction out of his total income a sum of Rs. 16,588 representing interest on loans from the Allahabad Bank and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the agreement and the Allahabad Bank filed a suit on November 15, 1952, for the recovery of the balance with interest. The suit was decreed with costs on April 12, 1955, by the civil judge, Allahabad. The decree included a sum of Rs. 15,270 on account of interest and costs. This figure together with the interest payable to the Bombay Life Insurance Company came to Rs. 16,755. Deducting a sum of Rs. 188 on account of interest received by the assessee, the net interest and costs payable worked out to Rs. 16,588. The assessee, late Sri Niranjan Lal Bhargava, was running three cinema houses at Allahabad, known as Bishambhar Palace, Moti Mahal and Rupbani. Previously the assessee used to be assessed in respect of business from these c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee himself and, as such, he was not entitled to any deduction on account of interest, etc. To us the argument appears to be wholly without force. If the assessee had transferred to the partnership firm the liability on account of two loans, the firm would have been entitled to claim deduction in respect of these loans but since the assessee did not do so and retained the liability he alone was entitled to claim the deduction. In the instant case, the assessee claimed deduction against his share income and not against the profits of the firm as a whole. We are, therefore, of the opinion that the view taken by the Tribunal is perfectly correct. We, accordingly, answer the question in the affirmative, in favour of the assessee and agains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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