Law:

Section:

JUDGMENT The first of the two questions referred to this court under section 66(1) of the Income-tax Act was : "Whether on the facts and in the circumstances of the case, the disallowance of any portion of payment of interest of Rs, 12,541 in the first year, Rs. 20,851 in the second year, and Rs. 40,302 in the third year on the amounts borrowed by the assessee for the purpose of his business is correct?" That factually the assessee paid Rs. 12,541 in the first year (the account year ending with 31st March, 1949), Rs. 20,851 in the second year and Rs. 40,302 in the third year towards interest on the loans he had contracted was apparently accepted by the Tribunal. What was ultimately allowed by the Tribunal as deduction was Rs. 8,000 in the first year, Rs. 14,000 in the second year and Rs. 13,000 in the third year. The question is whether the claim of the assessee should have been allowed in full. The accounts of the assessee were rejected as unreliable, and the gross income of the assessee had to be estimated under the proviso to section 13 of the Act in each of the three assessment years. The Assistant Commissioner and the Tribunal rightly overruled the view of the Income-tax Officer, that under such circumstances nothing was allowable as deduction, though the assessee had expended the amounts in question to meet the interest charges. But how much of the loans was borrowed for the transport business of the assessee, he had to prove, and while no accounts were produced for the third year, the books produced for the first two years were rejected as unreliable. The Tribunal had, therefore, necessarily to estimate how much of the payments represented interest on loans borrowed and utilised for the transport business of the assessee. It was for the assessee to prove that each of the loans on which he paid interest in the years in question was utilised for his business, and that burden the assessee did not discharge. There is really no material on record to sustain any possible contention that the estimates ultimately upheld by the Tribunal were unreasonable. We have to answer the first question in the affirmative and against the assessee. The second question, which…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492