2002 (1) TMI 47

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....the Tribunal has referred the following questions for the opinion of this court: "1. Whether the learned Tribunal was correct in law in holding that the interest received from the Bank of India, Union Bank of India and the United Commercial Bank on fixed deposits with the said banks and interest paid to the said banks on the amounts taken against the fixed deposit receipts are to be treated dis....

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....a Hindu undivided family, had fixed deposits with three banks and enjoyed interest income. The assessee had also regular business income. The assessee needed funds for the purpose of the business and for construction of the house. Therefore, he took loans from banks against the said fixed deposits and paid interest on such loans to the banks. The assessment years involved are 1977-78 and 1978-79. ....

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....IT v. Dr. V. P. Gopinathan [2001] 248 ITR 449. Mr. Ranka submits that only the net interest income is taxable when the Assessing Officer has also taxed the interest income received ignoring the interest paid during the period on loan used for construction. We have perused the assessment order and the order of the Appellate Assistant Commissioner as well as the order of the Income-tax Appellate ....

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....k and paid interest thereon his real income would not diminish to the extent thereof. The only question then is : does it make any difference that he took the loan from the same bank in which he had placed the fixed deposit. There is no difference in the eye of the law. The interest that the assessee received from the bank was income in his hands. It could stand diminished only if there was a prov....