TMI Blog1964 (2) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ar is 1952-53 and the corresponding accounting year is 2007-8 Dewali. The assessee is a partner in the registered firm of Messrs. Sadhuram Tolaram, from which he derived 1/3rd share of income in each of the three heads of property, business and other sources. In the year of account relevant to the assessment year 1952-53, he borrowed certain sums of money from Ramprotap Chamria for the purpose of paying income-tax in respect of assessments for preceding years. A sum of ₹ 1,934 was the interest due thereon and was paid. The Income-tax Officer refused to allow the deduction of this amount. 3. On appeal to the Appellate Assistant Commissioner, the assessee contended that if he had not borrowed this amount from Ramprotap Chamria, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxable income. 6. On these facts, the question of law that arises is: Whether, on the facts and in the circumstances of the case, the payment of ₹ 1,934 constituted an allowable deduction against the 1/3rd share of income from Messrs. Sadhuram Tolaram? J. C. Pal and J. B. Pal, for the assessee. E. R. Meyer and B. L. Pal, for the Commissioner. JUDGMENT SANKAR PRASAD MITRA J.- -This is a reference under section 66(1) of the Indian Income-tax Act, 1922. The assessment year is 1952-53. The corresponding accounting year is 2007-8 Dewali. The assessee is a partner in the registered firm of Messrs. Sadhuram Tolaram. From this firm the assessee derived one-third of the income in each of the three heads, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtent the borrowing had been made, the income-yielding asset had been preserved which otherwise would have been liquidated and would have interfered with the income brought to assessment; and (4) the payment of interest was an allowable deduction against the income. The departmental representative argued before the Appellate Tribunal that in the absence of connection between the expenditure and the income sought to be taxed, the payment of interest claimed ought not to be allowed. The Tribunal has held that the assessee was not entitled to claim the allowance of interest as a charge against the taxable income. Both the Appellate Assistant Commissioner and the Appellate Tribunal have relied on the judgment of the Bombay High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction out of his assessable income which is admittedly liable to tax. If he claims a deduction or allowance it is for him to satisfy the court that there is some statutory provision under which such a claim can be allowed. There are a number of decisions in which it has been laid down that where an assessee seeks to deduct from his business profits certain items as allowances under sub-section (2) of section 10, the onus of proving that such allowances are permissible falls on him. Reference may be made in this connection, amongst others, to the judgment of the Supreme Court in Commissioner of Income- tax v. Calcutta Agency Ltd. [1951] 19 I.T.R. 191; [1950] S.C.R. 1008. In the course of the argument we invited Mr. J.C. Pal to show to us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esult, therefore, is that our attention has not been drawn to any provision in the statute wherein a deduction or allowance of this nature has been contemplated. And in the absence of any statutory provision we do not see how the assessee's claim could be entertained by the taxing authorities. We may, in this connection, refer to a decision of the Patna High Court in Maharajadhiraj Sir Kameshwar Singh v. Commissioner of Income-tax [1961] 42 I.T.R. 774. It has said that the amount of income-tax paid by an assessee cannot be deducted as a business expenditure. The reason is that income-tax is not a deduction before you arrive at the net profits of the assessee. It is not an expenditure for the purpose of earning profits; it is, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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