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of <h1>Tribunal allows interest expenditure, confirms commission deductions, rejects trust income inclusion, and overturns interest disallowance.</h1> <h3>OMKARMAL GAURISHANKER. Versus INCOME TAX OFFICER.</h3> OMKARMAL GAURISHANKER. Versus INCOME TAX OFFICER. - TTJ 039, 223, Issues Involved:1. Deduction of interest as business expenditure.2. Deduction claimed for commission payments.3. Inclusion of income of Kalpesh & Sharad Trust in the assessee's income.4. Disallowance of interest paid on old deposits.Summary:1. Deduction of Interest as Business Expenditure:The first issue concerns the assessee's claim for deduction of interest as business expenditure. The assessee, a cloth dealer, debited Rs. 3,40,930 as interest in the profit and loss account. The ITO restricted the deduction to 12% per annum, disallowing Rs. 84,950, while the CIT(A) allowed interest at 21%, reducing the disallowance to Rs. 14,141. The Tribunal concluded that the interest rate of 24% per annum on unsecured deposits from relatives was neither unreasonable nor excessive for the assessment year 1983-84, directing the ITO to allow the entire interest expenditure.2. Deduction Claimed for Commission Payments:The second issue pertains to the deduction claimed by the assessee for commission payments totaling Rs. 64,262. The ITO disallowed the entire amount, citing improper documentation and violations of s. 40A(3). The CIT(A) upheld the disallowance of Rs. 5,610 paid to M/s Hira Agencies but allowed the remaining Rs. 58,652. The Tribunal confirmed the CIT(A)'s decision regarding the Rs. 58,652 but remanded the issue of Rs. 5,610 to the ITO for further verification.3. Inclusion of Income of Kalpesh & Sharad Trust:The third issue involves the inclusion of income from Kalpesh & Sharad Trust in the assessee's income. The ITO included Rs. 18,064, suspecting the trust was created to evade tax. The CIT(A) confirmed the addition of Rs. 8,772 but granted relief for Rs. 9,292. The Tribunal found no evidence to support the inclusion of the trust's income in the assessee's income, accepting the assessee's ground and rejecting the Revenue's ground.4. Disallowance of Interest Paid on Old Deposits:The final issue is the disallowance of Rs. 8,640 as interest paid on old deposits. The ITO disallowed the interest due to the lack of proper addresses for the depositors. The CIT(A) deleted the disallowance, noting that these were old deposits and interest had not been disallowed in the past. The Tribunal upheld the CIT(A)'s decision, rejecting the Revenue's ground.Conclusion:The Revenue's appeal is dismissed, and the assessee's appeal is partly allowed for statistical purposes.
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