9911796707
TMI Blog2004 (6) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 is dismissed as having not been pressed by the learned Authorised Representative during the course of hearing. 3. Ground No. 2 is regarding disallowance of interest of Rs. 1,33,161. 4. The brief facts of the case are that the assessee claimed payment of interest of Rs. 3,58,735 to various banks in respect of loans taken by him. The AO made the disallowance of payment of interest amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t pp. 3 and 4 of her, she sustained the disallowance to the tune of Rs. 1,33,161 out of total disallowance of Rs.3,58,735. The assessee is aggrieved against the sustenance of addition of Rs. 1,33,161. 5. We have heard the rival submissions and perused the materials available on record. We find that the learned CIT(A) had worked out the following interest disallowable as per the details given at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid out wholly and exclusively for the purpose as contemplated by sub-s. (1) of s. 37 of the IT Act. 8. In our opinion, this issue requires re-consideration by the AO. The AO is directed to verify whether the interest on advance tax had been paid out of the profits of the business or out of the loan raised from the bank. If the payment is made out of the profits of the business, the deduction may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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