2014 (11) TMI 1255

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts of the entire business and the sale proceeds were all deposited in the mixed overdraft account, the finding of the Tribunal that the sum by which the shares were purchased or the investments were made, came out of the overdraft and not out of the profits deposited with the mixed overdraft account is unreasonable and perverse and without any material or evidence whatsoever." The following facts are not in dispute: A sum of Rs. 99,99,800/- was invested by the assessee in the share capital of M/s. CESCON LTD. a 100% subsidiary company in the month of July, 1991 corresponding to financial year 1991-92 and assessment year 1992-93. The assessing officer held that borrowed funds were utilized for the purpose of the aforesaid investment and t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the shares of M/s. Cescon Ltd. which investment is not in any way for the purpose of the assessee's business." Mr. Khaitan, learned Senior Advocate, appearing for the appellantassessee, has drawn our attention to a Division Bench judgment of this Court in the case of Woolcombers of India Ltd. vs. Commissioner of Income-Tax (Central) Calcutta, reported in 134 ITR 219. The question, which cropped up for a decision in that case, was whether the expenditure disallowed by the assessing officer/ITO was sustainable in law. The ITO disallowed the expenditure in the following facts and circumstances: "The assessee had an overdraft account with the bank. On 12th December, 1969, i.e., a few days before the end of the assessee's accounting year on ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he assessee to produce the relevant evidence, the Tribunal has drawn an adverse inference. He added that the judgment of the Division Bench, relied upon by Mr. Khaitan, is essentially on the basis of facts and circumstances of that case which has nothing to do with the problem which has arisen in the case before us. We are unable to accept this submission. The Tribunal has laid stress upon the fact that "the loan fund by way of secured loan as well as unsecured loan has increased from Rs. 468,34,39,396/- to Rs. 509,07,68,172/-. On perusal of audited accounts of the assessee, we find that in overdraft account from bank the assessee had a balance of Rs. 43,85,52,956/- payable as at the end of 31.3.1992 as against Rs. 23,28,16,552/- as at the....