1986 (11) TMI 132

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..... tered firm which had obtained a contract for the construction of building for the MES. The assessee framed out the contract and the income consisted only of the commission received from the sub-contract. The assessee had borrowed funds and advanced it to M/s. Scrap Trading Co., for the purpose of purchase of iron and steel for utilisation in the building works. The claim of the assessee to deduct .....

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..... . But we are of the opinion that this issue cannot be decided with reference to the obligation but only with reference to the actual deployment of funds. It is not in dispute that the funds were actually utilised for obtaining iron and steel for the contract work and it cannot be denied that the borrowed funds were used for the purpose of the business of the assessee. Hence we delete the disallowa .....

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..... after taking into account the tax deducted, at source and, therefore, if a refund materialises because of excess payment of tax in whatever form, interest is to be given under s. 214 since the Govt, had the benefit of the amount within the accounting year. He also relied upon the decisions of the Gujarat High Court in Chandrakant Damodardas vs. ITO (1980) 16 CTR (Guj) 1 : (1980) 123 ITR 748 (Guj), .....

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