TaxTMI 
TaxTMI 
1992 (9) TMI 43
X X X X Extracts X X X X
X X X X Extracts X X X X
....to Messrs. East India Electricals and Messrs New India Electricals (Cal) Pvt. Ltd. should be disallowed ? 2. Whether the Tribunal was justified in holding that the interest payable by the assessee to its creditors and the interest received by him from his debtors were not interrelated so as to justify the exclusion of interest payable by him on the ground of non-receipt of interest receivable by him ? 3. Whether the Tribunal was justified in holding that the nature of income receivable from the advance made was not material in deciding the issue of the admissibility of interest on monies borrowed to support the above advances?" The additional question of law for the assessment year 1981-82 is as follows: "Whether the Tribunal was justif....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was of the opinion that "the interest payable on the borrowed sum to support the above advance is not allowable in view of the provisions of section 67. The Income-tax Officer also found that the assessee had debited interest at 12 per cent. on the supporting borrowed capital of the above sum. Therefore, a sum of Rs. 1,87,618 (Rs. 15,63,481 at 12 per cent.) is disallowed. In view of the above, the payments of interest of Rs. 9,48,974 (Rs. 11,36.692 less Rs. 1,87,618) in the assessment year 1981-82 and Rs. 13,54,226 (Rs. 15,41,844 less Rs. 1,77,618) in the assessment year 1982-83 were only allowed by the Income-tax Officer. The assessee, being aggrieved by the order of the Income-tax Officer, agitated the action of the Income-tax Officer be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dering the submissions of the authorised representatives for the parties and on examination of the materials on record and the facts and circumstances of the case, the Tribunal upheld the order of the Commissioner of Income-tax (Appeals) deleting the disallowance. We have considered the submissions of the parties. It is on record that the assessee borrowed money from his creditors and, out of such borrowed money, he advanced the two loans to Messrs. East India Electricals and Messrs. New India Electricals (Cal) Pvt. Ltd. These loans were written off by the assessee in the assessment year 1980-81 and it was upheld by the Commissioner of Income-tax (Appeals). So, the assessee is not receiving any interest out of the loans advanced to those t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n, the facts are that in the assessment year 1981-82, the assessee suffered business loss which was duly determined by the assessing Income-tax Officer. It was also noted in the said assessment order that the return for the said assessment year was filed in time but, in spite of this, the Income-tax Officer did not carry forward the said loss as determined and set it off against the income for the year under appeal. On appeal, the Commissioner of Income-tax directed that the said loss should be carried forward and set off against the income of the assessment year under appeal. The Department has challenged the order of the Commissioner of Income-tax (Appeals) allowing carry forward and set off of business loss. The Tribunal, by its order, h....