1980 (4) TMI 50

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.... RANGANATHAN J.-The question referred to us in this income-tax reference is as follows : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no justification in the disallowance of interest payment of Rs. 12,240 ? " The assessment relates to the assessment year 1967-68. The assessee is M/s. Premier Auto Finance P. Ltd. and carries on....

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....ee appealed to the AAC who confirmed the view taken by the ITO but on a different ground. From a letter dated March 29, 1968, written by the assessee to the ITO the AAC inferred that there was an agreement between the assessee and the Delhi Auto that the latter should pay interest. He, therefore, held that interest had accrued to the assessee but not shown in the return. This was the ground on whi....

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....essee. We are of opinion that the view taken by the Tribunal is correct and that the disallowance of Rs. 12,240 was not justified. The Tribunal has found that the transactions between the assessee and the Delhi Auto were purely business transactions. The Delhi Auto was dealer in trucks which had an arrangement with a Trivandrum concern in respect of Tata Mercedes Trucks or vehicles. The assessee w....

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....ng to this letter, the Delhi Auto was willing to pay interest. The Tribunal, he says, has ignored this finding of the AAC. His grievance was that the Appellate Tribunal had not considered the ground of disallowance mentioned by the AAC. In our opinion this criticism is not correct. The Tribunal has pointed out that the letter written by the assessee had been misinterpreted as implying the accrual ....