TMI Blog1939 (12) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... rotracted litigation, and as a consequence of sundry appeals, all the charges were dismissed and it was said that they left the Court with unsullied characters. And they say in effect that the costs to which the partnership firm, which was assessed as a partnership, was put as a result of defending the character of each individual partner and the Manager ought properly to be set off in one of two ways. First of all, it was expenditure within the meaning of Section 10(2)(ix) of the Income-tax Act, which runs as follows:- 10 (1). The tax shall be payable by an assessee under the head Business in respect of the profits or gains of any business carried on by him. (2) Such profits or gains shall be computed after making the following al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losses of the assessees. That means that before they arrive at the amount to be set down in the head of profits or gains in the opening words of Section 10, they should be permitted to deduct this as though it were a business loss. But, although a loss in some circumstances may have been brought about as a result of expenditure which has failed completely to effect the purpose intended when the expenditure was made, I do not think it can be said that when expenditure has been undertaken by persons to protect their good name and they have succeeded, they can be said to have suffered loss. Mr. Clark has pressed upon us that there was no advantage to them from the expenditure which they incurred. But we have to regard a loss as akin to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second and third questions in the negative, to deal for a moment with the first question propounded to us. We are of opinion that the Commissioner of Income-tax has mistakenly insisted upon the question in the form in which he has put it, and that the question whether the Assistant Commissioner of Income-tax has not misdirected himself in law in regarding the assessee firm as being an entity distinct from its partners , which Mr. Clark desired to have propounded, was the proper question: and the answer to that question, unfortunately, must be in the affirmative. The error is one of regarding the partnership as though it were an entity apart from the entities of its individual partners. The case of a partnership must be sharply distinguishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence, must be answered in the affirmative: the second and third questions must be answered in the negative. The assessees must pay the costs of the reference, advocate's fee twenty gold mohurs. MYA BU, J.--I agree with the Judgment of my Lord the Chief Justice. DUNKLEY, J.--I agree with the answers proposed by my Lord the Chief Justice to the three questions which have been propounded. On the first question, I have nothing to add to his judgment. With regard to the second and third questions, although there is not, in the Burma Income-tax Act, any provision similar to Rule 3(e) of Schedule D of the English Income tax Act, it is quite clear that in ascertaining the profits or gains, which are subject to assessment under the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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