CHHANGANI, J.—This is a reference by the Income Tax Appellante Tribunal (Delhi Bench B) referring the following question of law for answer by this Court:— "Where in the facts and circumstances of the case the payment of Rs. 2440 to the Accountant and the correspondence clerk who worked for the assessee to issue directions, maintain accounts and carry on the business is an admissible deduction?" 2. The material facts are as follows:— The assessee Jabarmal Dugar, who is an individual, derives income from various sources. He has a proprietory business in money lending at Sardarshahar in the name of self and is also a partner in the firm M/s Chainsukh Sampatram, Calcutta, the share from which forms the major part of the assessess income. He maintains two sets of accounts for his business. In one sets of accounts books in the name of M/s Sampatram Budhmal, his gross receipts were only Rs. 337 and the business expenses were shown as Rs. 2,440. In connection with his claim for the deduction of the amount of Rs. 2,440, the Income Tax Officer, A word, Bikaner, vide his order dated 10th January, 1963, allowed only a sum of Rs, 100 and disallowed the balance. On appeal by the assessee the Appellate Assistant Commissioner of Income Tax, Jodhpur noted that the books of accounts in the name of M/s Sampatram Budhmal were in the nature of "Head Office set of books" and that the expenses shown therein include expenses for the business in the name of Jabarmal Dugar and also for the business of the Calcutta firm. He noted that the assessee resided at Sardarshahr and managed the business of the Calcutta firm from Sardarshahr; The Calcutta firm sent reports of daily cash balances from Calcutta to Sardarshahr and from these a ledger was prepared by the assessees accountant whose salary was debited in the account books. Services of a part time employee were utilised for attending to the correspondence whose salary was also-debited in the set of books of accounts of M/s Sampatram Budhmal. He, therefore, held that the expenses incurred on account of the accountant and other employees were expenses incurred wholly and necessarily for the purposes of earning income from business including the share of profit from Calcutta firm. The entire claim of Rs. 2,440 made by the assessee was, therefore, allowed vide order dated 8-4-63. He, therefore, held that the expenses incurred on account of the accountant and other employees were expenses incurred wholly and necessarily for the purposes of earning income from business including the share of profit from Calcutta firm. The entire claim of Rs. 2,440 made by the assessee was, therefore, allowed vide order dated 8-4-63. Aggrieved by the order of the Appellate Assistant Commissioner, Jodhpur, the I.T. Officer filed an appeal before the appellate Tribunal Delhi Bench B The Tribunal held that the assessees income from share of profit in the firm was his income from business carried on by him and that the salaries paid to the accountant and the correspondence clerk were expended wholly and exclusively for the purpose of the business and were admissible deductions u/s. 37(1) of the I. T. Act. The Appellate Tribunal therefore, dismissed the appeal. On an application by the Commissioner of Income Tax the Tribunal drew up the statement of the case and referred the above quoted question of law for answer. 3. We have heard Mr. S.K. Mal Lodha for the Department and Shri S. C. Bhandari for the assessee. 4. We may at once observe that under the Income Tax Act of 1922 (hereinafter referred as the Act of 1922 it was settled by a number of decisions that the expenditure of the nature incurred by the assessee in the present case was admissible under sec. 10 (2) (xv) of the Act of 1922. We may notice only a few important decisions in this connection. 5. In Commissioner of Income Tax, Bihar vs. Ramnik Lal Kothari (1) a controversy raised on behalf of the Revenue that the profits derived by an assessee from the partnership business should be treated as having become net profits and that there should be no further deductions from the profits on account of the expenditure incurred by the partner. In repelling the contention of the Revenue the Patna High Court observed as follows— "It cannot be doubted that the income earned by the assessee from his share of the partnership business is income derived from business and so falls within the ambit of sec 10(1) of the Income tax Act. It is also manifest that the profits and gains contemplated by the legislature under sec. It is also manifest that the profits and gains contemplated by the legislature under sec. 10 are the true profits and gains, and ordinarily the true profits and gains of the assessee must be ascertained from the point of view of commercial expediency and commercial accounting. If, therefore, the assessee was able to establish in this case that the expenditure claimed by him was incurred as a matter of commercial expediency and for the purpose of earning profits from the partnership business, the assessee would be entitled to claim the deduction of the amount under sec. 10(2)(xv) of the Income tax Act or under the general principle laid down by the Privy Council in Commissioner of Income tax vs. S.W. Chitnavis 1932, 2 Comp. Cas.464, 59 T. A. 290." The following three cases were also noticed by the Court in support of its conclusions—(2) Shantikumar Narottam Morarji vs. Commissioner of I.T., (3) Commisso-ner of I. T., vs. New Digvijayasingh Tin Factory and (4) Jitmal Bhuramal vs. Commissioner of I. T. Indeed, the counsel for the Department did not join any serious controversy as regards the position of law under the Act of 1922 and we therefore consider it unnecessary to notice the other cases. The Departments contention, however, is that the position of law must be deemed to have been changed under the new Act and in this connection reliance was placed upon the language of sec. 87(3} of the Income tax Act, 1961, as follows— "Any interest paid by a partner or capital borrowed by him for the purposes of investment in the firm shall, in computing his income chargeable under the head "Profits and gains of business or profession" in respect of his share in the income of the firm, be deducted from the share." 6. A similar controversy arose in the Patna High Court in Commissioner of Income tax, Bihar & Orissa vs. Atmaram Modi(5). In deciding the controversy against the Department the Court observed as follows— "In my opinion, notwithstanding the charges made by the new Act, the main principle enunciated therein would apply with equal force." After quoting from Kangas Law of Income Tax, 5th Edn., page 498, and tracing the history of legislature the Court observed that "the legislature did not want to make sub-sec. (3) of sec. 67 exhaustive. (3) of sec. 67 exhaustive. If deduction could be claimed according to law under any other provision of the Act, that right would not be taken away merely by the provisions of sub-sec. (3) of sec. 67. Hence, the natural rule of harmonious construction, which requires full effect to be given both to sec. 37(1) and sec. 67(3) of the Act will prevail and the assessee would be entitled to claim to deduction permitted by sub-sec. [1] of sec. 37, provided the facts necessary for such claim have been stated and found in his favour." We are in complete agreement with the law expounded in the above case and have not been impressed by the arguments of the learned counsel for Department for taking a contrary view. 7. In this view of the law, the question referred to us deserves to be answered in the affirmative and we answer it accordingly.