TMI Blog1963 (11) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... Thayub Mohammad Hajee Moosa and Co., Madurai, hereinafter referred to as Thayub, Madurai. The Income-tax Officer refused the claim on the ground that all expenditure had to be claimed in the firm's assessment under section 10 of the Act. When the matter went up in appeal to the Appellate Assistant Commissioner, the authority found that the assessee had borrowed a sum of ₹ 90,000 from Messrs. T.S. Hajee Moosa and Company, Madras, with whom she had a running account and that this amount had been invested as capital in Thayub, Madurai. The Madras firm into which all her income, both the share income from the partnership and income from her other properties, was credited, adjusted those credits against the borrower, leaving a debit b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see during the year ending March 31, 1958. From these facts, the Appellate Tribunal took the view that the advance of capital of ₹ 90,000 to Thayub, Madurai, cannot be attributed to any borrowings at all, for in the Tribunal's own words: To all intents and purposes, it can very well be out of the sum of ₹ 1,01,000, the capital she received back from the Hameedia stores in which she ceased to be a partner on March 31, 1957. On the very same day, she acquired the share in the Madurai firm also. Mr. Padmanabhan relied on some letters from the assessee to the bankers to show her clear intention to invest the sum of ₹ 90,000 only from her borrowing. The overall position set out above is compelling and has to give way to wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, therefore, she need not have made any borrowing. It seems to us that this view is hardly sound. To take a general example, it may be that an assessee has in his banking account a large sum of surplus money available. But that does not prevent the assessee from making a borrowing elsewhere for the purpose of financing a business or a partnership. It is not unusual for persons to make borrowings if they could do so at a lower rate of interest for the purpose of making new investments and not to disturb their existing investments which may be earning a higher rate of interest. The fact, therefore, that the assessee had ample resources which she could draw upon for the purpose of making this investment and that she need not have borrowed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in the computation of the firm's income must have already been allowed in the assessment of the firm. We do not conceive it to be possible for an assessee to ask for an allowance of certain expenses connected with the audit of her own personal account either for the purpose of her own satisfaction or for the purpose of preparing the necessary account for submission to the income-tax authorities for assessment. These items of expenses were not incurred by her in connection with the business from which income was derived. On the other hand, as we have pointed out, that income was ascertained on the assessment of the firm in respect of which these necessary items of expenditure would normally have been allowed. This claim appears to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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