1986 (1) TMI 165

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....ere effected, by him in terms of s. 40-A(8) of the Act. There is no discussion in his order as to the basis of the computation of the disallowance in question. The assessment order for 1981-82 does mention that it is worked out at 5 per cent of the total deduction claimed at Rs. 41,071 but the assessment order for 1980-81 simply says "as per details filed". But the assessment order itself does not record such details. The assessee contested the disallowance in appeal. 4. Both the appeal (1980-81 and 1981-82) were disposed of by the CIT(A) on14th June, 1984by separate orders. In his order for 1980-81, the CIT(A) recorded the following while dismissing the assessee's appeal: "The question for consideration is whether the interest paid b....

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....ni and Soni S. Mirchandani (shareholders of the assessee-company). For the asst. yr. 1980-81, the interest paid to them was as under: "Mr. L. G. Mirchandani, Director Rs. 5,942.44 Mr. L. G. Mirchandani, HUF Rs. 9,976.63 Mrs. P. L. Mirchandani Rs. 4,732.06 Mr. S. L. Mirchandani, Director Rs. 8,892.04 Mrs. Soni S. Mirchandani Rs. 167.20 . 29,710.37" Similarly for the asst. yr. 1981-82, interest paid amounted to Rs. 41,072 and the details whereof were as under: "Mr. Padma Lalchand Mirchandani Rs. 9,446,74 Mrs. Soni S. Mirchandani Rs. 3,619.70 Mr. G. L. Mirchandani Rs. 1,299.69 M/s L. G. Mirchandani, HUF Rs. 3,838.50 . Rs. 18,204.63 ..Mr. S. L. Mirchandani 15,325.20 .....

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....T(A) erred in disallowing 15 per cent of the interest paid by the assessee in each of the years under consideration in respect of the amounts in the current accounts of the directors and the share-holders under s. 40-A(8) of the Act." Shri Bhalla, in fact, placed before us a copy of the Tribunal order in Sinter Kings Virmani (P) Ltd. vs. ITO (ITA Nos. 1588 & 1589/Del/83 dt. 24th Aug., 1984). Shri Bhalla submitted that the facts being materially different this year, we should follow the prior order of the Tribunal in this case and allow the assessee's claim in the light of the decision in CIT vs. Rama Murthy, L. G. & Ors. 1977 CTR (Mad) 416 : (1977) 110 ITR 453 (Mad). 6. The Departmental Representative, Smt. Kapila opposed the above su....