2014 (9) TMI 397

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....rwal, R. R. Agrawal For the Respondent : S. S. C.,R. K. Upadhyay ORDER (Delivered by Dr. Satish Chandra,J.) The present appeal is filed by the assessee against the impugned order dated 13.06.2005, passed by the Income Tax Appellate Tribunal, New Delhi in I.T.A. No.160/Del/2005 for the assessment year 2001-02. On 12.09.2005, a Co-ordinate Bench has admitted the appeal by passing the ....

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....by the Assessing Officer in the order dated 12.2.2004 which was set aside by the Commissioner of Income Tax(A) vide order dated 8.10.2004." The brief facts of the case are that, during the assessment year under consideration, the assessee was engaged in the trading of salt, sugar and bardana etc. The assessee has borrowed the unsecured funds from friends and relatives in the previous years and ....

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....said funds were never utilised for other purpose. He readout the relevant part of Section-36(1) of the Income Tax Act and submitted that all the three conditions were fulfilled, namely:- (i) the funds must have been borrowed or taken for the purpose of the business or profession; (ii) the interest should have been payable; and (iii) if the borrowing is not for business purposes and is for....

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....he ratio laid down in the case of Madhav Prasad Jatia Vs. C.I.T. [1979] 118 ITR 200 SC where the business purpose was defined. We heard both the parties at length and gone through the materials available on record. From the record, it is evident that the assessee has borrowed funds from his friends and relatives and paid the interest thereupon. The funds were borrowed for the purpose of busines....