TaxTMI 
TaxTMI 
2002 (11) TMI 72
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....sent in the case of assessee?" The facts as stated in the statement of case are, that the assessee is a partnership firm, carrying on business of importing timber and dealing in it wholesale. While completing the assessment for the assessment year 1990-91, the Assessing Officer denied the claim for deduction of interest payment of Rs. 3,22,438 to a foreign banker from the business income under section 40(a)(i) of the Income-tax Act, 1961 as the required tax was not deducted at source under Chapter XVII-B of the Income-tax Act. On appeal, the Commissioner of Income-tax (Appeals) allowed the payment of interest in a sum of Rs. 1,06,296 and for rest of the amount rejected the appeal. On further appeal by the assessee, the Appellate Tribunal....
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....rest after the due date of the bill. There is absolutely no material whatsoever is made available by the assessee to come to the conclusion that the extract of Karur Vysya Bank taken note of by the Tribunal is pertaining to the transaction of import, which is the basis for the claim of payment of interest, and there is considerable confusion on the part of the assessee in claiming deduction in respect of a sum of Rs. 3,17,805 towards interest payment as stated above and thus the relief granted by the Appellate Tribunal is without any material. The reliance on the circular of the Board under Circular No. 65 dated September 2, 1971, also would not in any way give a helping hand to the Tribunal to come to the conclusion. Mr. Janakiraman, le....
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....n 40(a)(i), tax is to be deducted only if the interest payable outside India is chargeable to tax in India. The assessee has also claimed that since the money has been lent outside India the interest also accrues outside India and therefore the amount is not taxable in India." It is rather strange to note that before the Commissioner of Income-tax (Appeals), the stand of the assessee was totally different, the relevant portion of paragraph No. 4 of the first appellate order, which is extracted as follows: "The appellant's representative objected to it on the ground that the expenditure debited under the head, 'interest' was finance charges to Grindlays Bank, Madras, at a certain percentage of supply bills, received by the appellant an....
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....the amount paid by the bank towards the discounting of usance bills or hundies by the foreign exporter and there are lot of variance in the stand and also the bank through which the bills are discounted or negotiated. From the materials made available before us, we are of the considered view that there is absolutely no material, much less, sufficient material available for the Tribunal for regarding the payment of interest towards the sale price of timber. The conclusion arrived at by the Tribunal is based on presumption as extracted above. In a taxing statute, there cannot be presumption as to the facts. The person, who claims the benefit under the provisions of the Act, has to prove before the authorities that he is entitled to the ben....