1999 (6) TMI 9

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t the interest claimed by the assessee could not be allowed as deduction ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in holding that the borrowed money invested from April to August, 1980, had no bearing or nexus to the allotment of shares by the private limited company upon the take-over of the firm in which the assessee was a partner, and that there was no nexus established between the borrowings and the acquisition of shares ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee had a duty and liability to make good the debit balance in his capital account which came about because of the accumulatio....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Deputy Commissioner (Appeals) accepted their contention and allowed the appeals. Hence the Department filed the appeals in the Tribunal. The Tribunal while allowing the departmental appeals found that the borrowings were made in order to liquidate the outstanding debit balance against the partners in the firm's account. The Tribunal further observed that nothing was available to the assessees which could be said to have been utilised in the purchase of shares in the private limited company which ultimately took over the firm in October 1983. The Tribunal noted the fact that the firm made profits after 1980 and the capital accounts of the partners thereafter showed credit balance. It was observed : "The amount invested out of the borr....