1980 (12) TMI 73

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....hem Industries, Bombay, a partnerships firm engaged in the business of manufacturing industrial detergents, etc. the Department's common objection pertains to the deletion by the AAC of addition of Rs. 5,000 for the asst. yr. 1976-77 and Rs. 5,500 for the asst. yr. 1977-78 on account of disallowance of interest. The ITO found that the assessee had, as in the past, borrowings from bank and other pa....

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....on, the overall picture of the business of the assessee had to be taken into consideration and when so considered, it was apparent that though the assessee had substantial funds it chose to borrow moneys from Bank and other parties to make advances to its business customers, while the surplus funds were utilised for withdrawal by the partners for their personal purposes. It is, therefore, submitte....

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.... purpose of the business and it has also been utilised for the assessee's business purposes, there is absolutely no justification for sustaining the disallowance in support of which strong reliance was placed on the decisions in CIT vs. Gopikrishna Muralidhar 47 ITR 469, Kishinchand Chellaram vs. CIT 1977 CTR (Bom) 694 : 1978 114 ITR 654 (Bom) and CIT vs. Bombay Samachar Ltd. (1969) 74 ITR 723 (Bo....