1971 (3) TMI 38 - HC - Income Tax

Whether Tribunal was bound to hold that the business at Lahore and Barabanki did constitute the same business so as to justify the allowance of Rs. 40, 000 as interest - Tribunal has specifically held that the activities at Barabanki and Lahore were quite diverse and distinct and there was no interconnection interlacing or interdependence between the two businesses - Since the businesses were held to be separate and there was no interconnection the interest paid on liability of the other business which was transferred to the second business could not be claimed as a deduction

Summary

The High Court of Allahabad ruled against the assessee in a case involving deduction of interest for business liabilities transferred from Lahore to Barabanki. The Tribunal found no interconnection between the two businesses, leading to disallowance of the deduction. The court answered the question in the negative, favoring the Commissioner of Income-tax. The Commissioner was awarded costs of Rs. 200.