9911796707
TMI Blog1982 (3) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... aim to the extent of Rs. 4,025. The assessee is a firm of chartered accountants. The assessee claimed interest payment of Rs. 23,781 on loans, which were said to have been raised for the purpose of construction of the property at No. 29, Coats Road, T. Nagar, Madras, used for the purposes of the profession. The account of the partner, Shri E.V. Subramanian, showed opening and closing debit balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture, the loan loses its character of being a borrowing made wholly and exclusively for the purposes of business or profession. According to the AAC, the assessee's balance sheet showed the following position : (Rupees in lakhs) 31-3-1977 31-3-1978 Partner E. V. Neelakantan 0.05 0.12 Loans 1.37 1.35 Bank O.D. 0.09 0.06 ----------- ---------- 1.51 1.53 ----------- ---------- Busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e profession and that there was no diversion of borrowing for personal purposes. The department has not established any nexus between any borrowing and the overdrawing by the partner. The AAC's proposition that even if a loan is immediately used for business purposes but the subsequent surplus cash is not applied for the repayment of the loan, interest would not be allowable under section 36(1)(ii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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