9911796707
TMI Blog2004 (6) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to Rs. 3,58,735. The learned CIT(A) has discussed this issue at p. 2 of his order and observed at p. 3 in para 3.2 that the assessee had obtained O.D. facilities from various banks against the pledging of his FDRs. The amount taken from the banks had been utilized for giving loan. After analyzing these loans, it was found that in certain cases loans had been advanced at a rate of lower than the interest amount being paid to the bank. Thus, to the extent the assessee had paid in excess over the amount of interest due to him, the same was certainly not allowable as a deduction. Similarly, interest on account of advance to family members for personal purposes and for payment of advance income-tax was not allowable. After going through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest to Shri M. Garg was for the purpose of business. Therefore, the AO is directed to allow relief of Rs. 1,483. 7. After having considered the facts of the facts, we find that the disallowance of interest had rightly been computed by the learned CIT(A). The learned Authorised Representative had also submitted that interest of Rs. 53,330 paid on loan taken for payment of advance income-tax was also an allowable deduction as held in the case of Woolcombers of India Ltd. vs. CIT (1981) 23 CTR (Cal) 204 : (1982) 134 ITR 219 (Cal). On the other hand, attention was also invited to the case of East India Pharmaceutical Works Ltd. vs. CIT (1997) 139 CTR (SC) 372 : (1997) 224 ITR 627 (SC). In the first case, the deduction on interest on loan ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written only the words "issue demand notice and challan". Therefore, no interest can be charged in the absence of the specific direction with section under which interest is chargeable. Reliance is placed on the case of Uday Mistanna Bhandar Complex vs. CIT Anr. (1997) 137 CTR (Pat) 376 : (1996) 222 ITR 44 (Pat). This decision was affirmed by Hon'ble Supreme Court in the case of CIT Ors. vs. Ranchi Club Ltd. (2000) 164 CTR (SC) 200 : (2001) 247 ITR 209 (SC). Reliance has also been placed on the decision dt. 10th March, 2004 of this bench in the case of Asstt. CIT vs. Gulab Devi in IT(SS)A No. 40/Jp/2002. Therefore, the AO is directed not to charge interest under s. 234B and 234C of the IT Act. 13. In the result, the appeal of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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