1999 (12) TMI 25

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....pplication under section 256(2) of the Income-tax Act, 1961, the Commissioner of Income-tax, Meerut, prays that the Income-tax Appellate Tribunal, Delhi, be directed to draw up a statement of the case and refer the aforementioned question stated to be of law arising out of the Tribunal's order dated October 13, 1994, passed in ITA No. 1377(Delhi) of 1990 for the assessment year 1988-89 to be refer....

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....association of persons borrowed money from its various members and paid interest amounting to Rs. 18,71,2 76. The Assessing Officer did not allow this expenditure as a deduction while computing the income of the association of persons. On appeal, the Commissioner of Income-tax reversed that decision and held that the payment of interest was a business expenditure and, therefore, allowed deduction ....

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....the association to him is legitimate deduction under section 10(2)(iii) of the Indian Income-tax Act, 1922, in computing the profits of its business. Therefore, the Tribunal was right in applying this decision and the answer to this aspect of the question is self-evident. As regards the question relating to the absence of prohibition in the Act, no provision is pointed out which may prohibit an....