TaxTMI 
TaxTMI 
1999 (7) TMI 113
X X X X Extracts X X X X
X X X X Extracts X X X X
....2AB. 2. The brief facts of the case are that the assessee had purchased new plant and machinery of Rs. 6,21,260 during the year under consideration. For this purpose, a loan of Rs. 4,40,590 was taken from Sholapur Janata Sahakari Bank Ltd. and rest of the amount of Rs. 1,80,670 was utilised out of its own day-today money available with the assessee. On the first day of the accounting year, the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the CIT(A). 3. The learned counsel for the assessee Mr. Sathe has submitted and agreed before us that assessee was not entitled to deduction to the extent the amount was borrowed from the bank or utilised out of the reserve. However, it was submitted by him that entry made by the assessee with reference to the reserve account was merely the paper entry and did not represent the correct state ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under consideration. Therefore, the assessee would not be entitled in respect of the amount utilised out of the borrowed money or out of the reserves created by the assessee in the preceding years. The reserves credited by the assessee are nothing but the part of capital of the assessee which is normally blocked in the assets which may be capital assets or trading assets. Therefore, if any amount....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome of the assessee as per the P&L a/c was Rs. 7,49,907 while the income computed by the assessee before the claim under s. 32AB was Rs. 9,01,909. Even the assessed income was Rs. 9,38,870. From the details furnished by the assessee, it appears that the plant and machinery were purchased in the last quarter of the assessee. Therefore, it can be safely presumed that the amount of Rs. 1,80,000 was a....