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TMI Blog1988 (9) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... e same to Miss Anju Mahatta and that the gift was a valid one and the interest payment of Rs. 3,375 and Rs. 4,711 relating to this gifted amount for the assessment years 1970-71 and 1971-72, respectively, was an allowable deduction in the case of the assessee-firm ?" The firm, Mahatta Construction Co., at Ketekibari at Tezpur, is the assessee in this case. The question relates to the assessment years 1970-71 and 1972. Mohanlal Choudhury, a partner of the firm, had a credit balance of Rs. 36,619.82. In the relevant year, the profit to his credit was Rs. 36,619.12. Out of the total amount he had withdrawn Rs. 50,000 and made a gift of the amount to his niece, Anju Mahatta, on July, 19, 1969. The closing balance for that year, i.e., 1970-71, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdraw money from the capital account. In the absence of any contract, there is no presumption that partner could withdraw the money. Because other partners have withdrawn money, that does not mean there is no prohibition to withdraw the amount. It was on this ground that the Revenue contended that the withdrawal was improper and that the payment of interest to the niece or to the creditor was properly disallowed by the Income-tax Officer. Learned counsel appearing for the assessee argued that this court is to call for findings on these aspects, viz., whether there was an express agreement between the partners to withdraw money, whether Mohanlal Choudhury was contractually obliged to bring in original capital, whether Mohanlal Choudhury ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held in the appeals. There is no necessity to call for any additional finding from the Tribunal as argued by learned counsel for the assessee. On the conclusions reached, there was no impropriety in withdrawing the amounts. The fact that in the instant case, the gift was made and tax was levied on the gifted amount shows there was per se no illegality in the transaction. We, for all the aforesaid reasons, do not see any illegality when the depositor was paid interest as has been done in this case. A large number of cases have been cited in this instant case but we do not see any necessity to refer to those cases. We answer the question in the affirmative, against the Revenue and in favour of the assessee. No costs. S. N. PHUKAN J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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