1982 (1) TMI 127

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..... ngaged in the business of manufacture and sale of cloth, relates to the deletion of the disallowance of interest of Rs. 13,992 made by the ITO in the assessment on account of debit balance in the account of partners. The ITO noticed that in the case of such of the two of the assessee s partners P.S. Jawahar and P.S. Ravichandran there was a debit balance representing substantial withdrawals, but t .....

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..... en by the assessee-firm during the relevant previous year which ended on 3rd November, 1978 material for asst. 1979-80 were in their entirety utilised for the assessee s trade disbursements and no part of its was advanced to the partners. He also noticed that if the accounts of all the four partners were considered together the net effect would show a credit balance indicating net amount due from .....

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..... on which it was paying interest has been diverted to personal purposes of the two partners. The assessee relied on the order of the CIT(A). 4. On a consideration of the facts and the contentions, we do not find any merit in the department s objection. The facts found by the CIT(A) are not disputed, according to which the borrowings during the relevant year by the firm were entirely use for its b .....

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