REGE, J. - (1.)THIS reference is by the Income -tax Appellate Tribunal, Bombay Bench B, under s. 256(1) of the I.T. Act, 1961, at the instance of the assessee, referring the following question to us for our opinion :
'Whether, on the facts and in the circumstances of the case, the litigation expenses of Rs. 25,599 or any part thereof as claimed by the assessee were rightly disallowed by the Tribunal ?. In this case we are concerned with the assessee year 1958 -59. The assessee is an HUF of Bilasrai Juharmal. In the return for the said assessment year the assessee had claimed, amongst others, a sum of Rs. 44,346 as deduction towards legal expenses under the tens s. 10(2)(xv). He, (karta), however, gave particulars only of Rs. 43,581. Out of the said amount of Rs. 43,581 the assessee did not press his claim for Rs. 4,688. The balance of the amount consisted of the following three sums : (a) Rs. 11,214 -legal expenses in connection with a suit filed by the assessee against one Barjoria ; (b) Rs. 25,599 -legal expenses in connection with suit No. 120/57 filed by the assessee against the other partners of the firms of Sarupchand Prithviraj and Juharmal Sarupchand ; (c) Rs. 2,080 in connection with sundry items.

(2.)THE ITO allowed as revenue expenditure expenses under item Nos. (a) and (c) above, but disallowed item No. (b), viz., Rs. 25,599 on the ground that the said legal expenses were not incurred for the purpose of business.
Against the said order of the ITO, amongst others rejecting the assessee's said claim of Rs. 25,599, the assessee filed an appeal to the AAC. The AAC by his order dated November 27, 1964, inter alia, confirmed the order of the ITO disallowing the assessee's said claim.

(3.)AGAINST the said order of the AAC, the assessee appealed to the Tribunal. The Tribunal found from the material on record that the assessee had gained substantially by filing the suit and had obtained a far higher amount as his share of the partnership property and assets than he would have otherwise got and that the said legal expenses were incurred in connection with the said suit, filed by him against the other group of partners in the said partnerships. However, after referring to various decisions cited across the bar, the Tribunal dismissed the appeal and confirmed the order of the AAC, disallowing the said expenditure as revenue expenditure by observing :
'After considering all the authorities, we are inclined to the view that a partner cannot claim deductions, in his personal assessment, of legal expenses in a suit for dissolution of the firm. Such expenditure is only to settle disputes between partners and is not laid out for the purpose of the business.