1984 (8) TMI 49

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....Whether, on the facts and in the circumstances of the case, the assessee is entitled to the allowance of bad debt of Rs. 94,402 or any part thereof ? 3. Whether, on the facts and in the circumstances of the case, the assessee is entitled to the allowance of Rs. 3,801 against business income ? " Assessment year 1969-70 " 1. Whether, on the facts and in the circumstances of the case, the interest of Rs. 35,000 paid to Shri K. J. Somaiya is allowable against dividend income under section 57(iii) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to the allowance of bad debt of Rs. 2,200 or any part thereof ? " We are concerned with two assessment years 1968-69 and 1....

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....n the basis that the interest was not paid for acquiring any income earning asset but for acquiring an asset which was meant to be immediately donated to a charity. That the assessee had this intention can be gathered from the circumstances and particularly bearing in mind the very short time interval between the acquisition of the assets and its donation to the charitable trust. This is precisely the basis on which the Tribunal disallowed the claim of the assessee. If we peruse the provision of s. 57 of the I.T. Act, 1961, we find that the view of the Tribunal is borne out by the phraseology employed and, in our opinion, there is little that can be urged against either the approach or the ultimate conclusion of the Tribunal in respect o....

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....r. This is set down by the Tribunal in the following passage: "If the assessee had conducted money-lending business, it could have certainly informed us as to what was the total capital in the said business, what was the extent of loans taken from outside parties, what was the total interest paid by the assessee, whether it owned a money-lending licence or whether it advanced funds only to traders, what was the extent of rolling of the circulating capital and such other relevant factors. No such evidence has been produced before us. The only material before us is that the assessee invested considerable amounts in purchase of shares and the interest paid on these advances was claimed against dividend income, of course after debiting the i....