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TMI Blog1985 (2) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to the disallowance of a sum of Rs. 1,170 under the head postage and telegram expenses and another sum of Rs. 11,166 under the head electricity expenses. The assessee was having its business premises in the same building as an allied concern styled Baldeo Raj Tarachand. There was a common electric meter. The assessee was using the telephone of the said allied concern. On 31st Jan., 1976, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged by the firm on the aforesaid drawings by the partners. The ITO calculated the interest at 12 per cent on the over drawings which came to Rs. 20,000. He held that the loans borrowed from M/s R. N. Trading and A. K. Trading on which the assessee firm paid interest were given to the aforesaid partners and so they were not used for the purpose of the assessee s business. In this view of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had to pay regarding electricity charges and telephone services until 31st Jan., 1976 when it received the Debit Note. Hence, as far as the assessee was concerned, the aforesaid expenses accrued on that day and so were allowable during the year under consideration. Regarding the interest payments, he pointed out that the borrowings from M/s R. N. Trading and A. K. Trading stood at Rs. 20,500 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n later. The firm neither paid interest to the 5 partners nor did it charge interest from the three partners. The amounts borrowed from the aforesaid two firms by the assessee already stood invested in the business of the assessee. Hence, he urged that there was no justification for disallowing the interest under consideration and there was never any such disallowance in the past. 4. I have cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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