TMI Blog2000 (7) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessment years 1993-94 and 1994-95 and the only question in the appeals is whether the assessee is entitled to the deduction of the interest paid in respect of the amounts borrowed for the capital invested in the firm in which he is a partner, against the income by way of remuneration received by him from the firm. 2. From the assessment year 1993-94, a new scheme of taxation of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head business , any interest paid by the partner for the purpose of earning the remuneration must also be deducted. A fiction must be extended to its logical conclusion and one s mind shall not boggle down when it comes to the extension of the fiction to all its logical consequences. The objection raised by the revenue authorities is that the interest is not paid for the purpose of earning the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be the service contract, but the causa causans is the partnership. The Supreme Court held that when an arrangement is made by which a partner works and receives amounts as wages for services rendered, the agreement should in truth be recorded as a mode of adjusting the amount, that must be taken to have been contributed to the partnership s assets by a partner, who has made what is really a cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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