Dr. B. P. Saraf, J.-By this reference made at the instance of the Commissioner of Income Tax, the Income Tax Appellate Tribunal, Gauhati Bench, Guwahati has referred the following question of law for opinion: "Whether on the facts and in the circumstancee of the case, the Hon'ble Tribunal was justified in directing that the interest paid by the assessee on loan taken by him for construction of the shop premises which were not used by him in his business but was given user by the firm in which he was a partner should be allowed as a deduction from the income of the assessee as his business expenditure." The question is not happily worded. The expression "but was given user by the firm in which he was a partner" does not appear to be appropriate. The proper expression should have been "but used by the firm in which he was a partner". However, as there is no ambiguity about the controversy for determination, we do not propose to reframe the question. The assessee is a Hindu Undivided Family (HUF). The relevant assess­ment year is 1977-78. During this year, the assessee had income from various sources including business income assessable under the head "profits and gains of business". Such business income was by way of share of profit from two registered firms, namely, M/s Ramdeo Ranglal and M/s Hind Commercial Stores in which the Karta of assessee HUF was a partner in his representative capacity having 25% share in the profits of each of the two firms. The assessee owned a building which was used as shop premises by one of the aforesaid two firms, namely, M/s Ramdeo Ranglal. The assessee took a loan of Rs. 1,25,000/- from the Syndicate Bank for the purpose of renovating the said building, which was used by the firm for its business purposes. During the relevant assessment year the assessee paid interest amounting to Rs. 5658/- to the bank on the said loan. This amount was claimed as a deduction from the business income of the assessee on the ground that the money borrowed from the bank in respect of which the interest was payable was used in connection with the business of the assessee. The, claim of the assessee was rejected by the Income Tax Officer. This amount was claimed as a deduction from the business income of the assessee on the ground that the money borrowed from the bank in respect of which the interest was payable was used in connection with the business of the assessee. The, claim of the assessee was rejected by the Income Tax Officer. The assessee filed an appeal to the Appellate Assistant Commissioner, who also confirmed the disallowance made by the ITO on the ground that the nexus between the petitioner's business activities and construction of the building was remote. The assessee preferred second appeal before the Tribunal. The Tribunal allowed the claim of the assessee for deduction on the ground that the building in question, which was used as a shop by the firm, in which the assessee was a partner, for the purpose of its business was a business asset of the assessee and, as such, the interest paid for obtaining loan to renovate the building was allowable as ^deduction from the business income of the assessee. Aggrieved by the decision of the Tribunal, allowing the claim of the assessee for deduction of Rs. 56S8/-, the Revenue applied under section 256 (1) of the Income Tax Act, 1961 (the Act) before the Tribunal for reference of the aforesaid question to this Court for its opinion. Accordingly this reference has been made to us. We have heard Mr. D. K. Talukdar, learned counsel for the Revenue" who submits that the shop in question not being used by the assessee himself but allowed to be used by the firm in which the assessee was a partner, the interest paid on the loan obtained for renovating the said building cannot be termed as business expenditure of the assessee. Reference is made in this connection to section 36 (1) (iii) of the Act which, so far as relevant, reads : "36. Reference is made in this connection to section 36 (1) (iii) of the Act which, so far as relevant, reads : "36. Other deductions-(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28- (i) to (ii) … … … (iii) the amount of the interest paid in respect of capital borrowed for the purposes of the business or profession ..." The contention of the counsel is that the interest paid in this case does not fall within the ambit of the aforesaid clause (iii) inasmuch as the "capital" in respect of which the interest in question has been paid was strictly speaking not borrowed for the purpose of business or profession. There is no dispute that the building in question was used for the purpose of the business of the firm in which the assessee was a partner having 25% share in the profits and losses thereof. The only question for determination is whether the user of a commercial asset by the firm in such a case would amount to user by the assessee for the purpose of business or profession. We have carefully considered the. submission. The facts are simple and clear. The controversy is in a very narrow campus. There is no dispute that if the building in question had been used by the assessee HUF for some proprietary business of its own, it would have been entitled to get deduction in respect of the interest paid on money borrowed for renovating the building from its business income. The only controversy is whether it would be disentitled to get the deduction if it is used not for a proprietory business, but for the business of a firm in which it also had a share. There is dispute that the business of the partnership was also the business of the assessee except with the difference that it was not exclusively its own and was carried on in partnership with some others. The asset in question was used for such business. The assessee derived income from the business run in partnership. It contributed capital for the business of the firm. Besides, the assessee also allowed the shop premises in question to be used by the firm for the business. The question is whether such user is user by the assessee. The asset in question was used for such business. The assessee derived income from the business run in partnership. It contributed capital for the business of the firm. Besides, the assessee also allowed the shop premises in question to be used by the firm for the business. The question is whether such user is user by the assessee. The answer appears to be `yes'. The reason is simple. The firm in the strict sense, has no legal identity of its own independent of the partners though for the purpose of Income tax, it has been treated as a taxable entity, independent of and distinct from its partners, That however, is only far a limited purpose which is evident from the fact that by virtue of the status of the firm as a separate taxable entity and its assessment to tax as such, the partners are not relieved from payment of tax in. respect of income of the firm failing in their sham. In fact, there is a double taxation. The firm pays income tax at the specified rates on its total income. So far as far partners are concerned, the income received by them from the firm which has already been subjected to tax as an independent taxable entity, is again included in their income and assessed to tax along with other income, if any. Under the circumstances, it cannot be said that the business of the firm is not the business of its partners. The share of income received by a partner from the business of the firm is assessable under the head `-profits and gains of business or profession". It is not assessed as income from other sources on the plea that the business is being run by the partnership and not by the assessee. That being so, any expenditure made by the partner for the business of the firm would also be expenditure incurred by him for the purpose of business and shall be allowable as deduction in computation of his income from business including share of income from the firm. That being so, any expenditure made by the partner for the business of the firm would also be expenditure incurred by him for the purpose of business and shall be allowable as deduction in computation of his income from business including share of income from the firm. It may also be observed that the interest paid being an expenditure, and expended by the assessee wholly and exclusively for the purpose of the business as indicated above, it shall also be allowable as a deduction from the income chargeable under the head "profits and gains of business or profession” as under section 37 of the Act which is the residuary section even if it is held that the amount borrowed in the instant case does not strictly fall under section 36(1)(iii) on the ground that the money borrowed for the purpose of renovation of the business asset, namely, the shop premises might in the strict sense be not "capital borrowed" In the light of the foregoing discussion, we answer the question referred by the Tribunal in the affirmative, that is, in favour of the assesses and against the revenue. We make no order as to cost.