JUDGMENT :

A. Pasayat, J. - The challenge in these writ applications revolves round the legality of Circular No. 737 (see Trilok Chandra Garg Vs. Asstt. Director (Investigation) Income Tax, ), dated February 23, 1996, issued by the Central Board of Direct Taxes (in short "CBDT"), relating to admissibility of deduction on account of salary and interest to the partners of firms opting for estimation of income under Sections 44AD and 44AE of the Income Tax Act, 1961 (in short the "Act"). Same was issued on the ground that doubt has been raised relating to deduction as regards salary and interest to the partners of a firm while estimating income on the basis of the aforesaid two provisions. The view impugned as expressed in the circular is at paragraph 4 thereof, and reads as follows (page 98) :

"4. Clause (b) of Section 40 lays down restriction on the deduction allowable on account of salary and interest to the partners and is not an enabling section for claiming deduction. The admissible deductions are specifically mentioned under Sections 30 to 38 of the Income Tax Act. Hence, Sections 44AD(2) and 44AE(3) only state this obvious position by way of clarification. However, in view of t