TaxTMI 
TaxTMI 
1992 (3) TMI 46
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....on the facts and circumstances of the case, the Tribunal was justified in law in holding that the agreements under which Rs. 50 lakhs and Rs. 40 lakhs were borrowed provided for the repayment thereof during a period of less than seven years ? 2. Whether, in view of the facts and circumstances of the case, the Tribunal was justified in law in holding that the loans were not composite loans for a common object and supported by hypothecation or common goods? 3. Whether, in view of the facts and circumstances of the case, the Tribunal was right in law in holding that the period of repayment of loan was not beyond seven years notwithstanding that the payment was made after seven years and a small amount was outstanding? 4. Whether, in v....
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....an was advanced on June 30, 1967. This loan was repayable in six instalments. The first instalment was to be paid in 1968 and the last in 1974. In the course of assessment proceedings, under section 6(2) of the Companies (Profits) Surtax Act, 1964, for the assessment year 1970-71, the assessee claimed that the two loans qualified to be included in the capital of the company for the purpose of surtax. The Income-tax Officer accepted the claim of the assessee and, while computing the capital of the assessee-company under the Second Schedule to the Act for the purpose of arriving at the statutory deduction, included the outstanding amount of Rs. 58,50,000 in the capital of the assessee-company. On examining the records of the assessment ....
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....reement between the assessee-company and the bank under which the loans were made repayable beyond the period of seven years. This contention was rejected, as it was taken by the assessee-company for the first time before the Tribunal and no evidence in support thereof was led. It was even conceded that there was no evidence or material to prove the said oral agreement or the terms thereof. The Tribunal also held that there was no evidence to show that the monies borrowed were utilised for creation of capital assets in India. It held that, merely because there was an increase in the assets of the company after the taking of the two loans was of no consequence or relevance in the absence of any correlation between the monies borrowed and the....
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....ommunicated to the borrower. The borrower thereafter agrees to accept the loan on the terms and conditions set out by the financial institution. Thereafter, the financial institution will take steps to advance the loan. All steps taken before making actual payments are in the nature of negotiations and till money is paid to the borrower, it cannot be said that the borrower has borrowed money from the financial institution. A borrower cannot be said to have borrowed money till he actually gets money. As rightly pointed out by the Tribunal, when the bank sanctioned two loans in this case, it was really a matter of their internal administration. That apart, rule 1(v), which reads as under : " 1. Subject to the other provisions contained in ....
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....e moneys which were borrowed were utilised for creation of capital assets in India. He pointed out that, in the letter written to the bank a copy of which was already produced before the authorities, it was clearly mentioned that the moneys were required for the purpose of increasing the production capacity of the Baroda plant and for erecting a new factory at Bangalore. Thus, the moneys were borrowed for creation of capital assets within India. He also pointed out that the capital assets of the assessee-company had increased after the assessee obtained the said two loans and thus there could be no doubt that the moneys borrowed by the assessee-company from the bank were utilised for the purpose of creation of capital assets. Merely because....