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TMI Blog2011 (7) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... 96-97 for which the relevant previous year was the financial year ended on March 31, 1996. b) During the previous year ending on March 31, 1996, the appellant's Managing Director travelled overseas to Argentina, Brazil, Cuba, Columbia, Russia, Germany, U.K and other countries in Europe to hold discussions with Foreign Collaborators with regard to manufacturing process etc. in terms of the Collaboration Agreement and to meet and hold discussions with the material suppliers on better material management. There were eight such overseas visits by its Managing Director. c) According to the appellant, in order to strengthen business relations and promote better business understanding, it was necessary for the Managing Director to be accompanied by his wife in accordance with the practice abroad. In keeping with modern items and social customs, the Managing Director was accompanied by his wife since for the promotion of business for which the foreign visits were undertaken, such social aspects could not be overlooked. It was also necessary according to the appellant for the spouse to accompany her husband in order to reciprocate the visits to India of the foreign business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excess of the interest-free loans given to the subsidiaries and that no part of the borrowed money was utilized for giving the loans out of the composite cash credit accounts in which all sale proceeds and income were deposited and out of which all expenditure were met, the appellant submitted the working as desired by the Commissioner of Income-tax (Appeals) which resulted in a figure of Rs.27,220/-. i) The Commissioner of Income-tax (Appeals), by order dated March 24, 2003 upheld the disallowance of the foreign travel expenditure of the spouse of the Managing Director and also restricted the addition on account of interest to Rs.27,220/-. j) Being dissatisfied, the appellant preferred an appeal before the Income-tax Appellate Tribunal and the Tribunal by order dated April 15, 2004 upheld the order of the Commissioner of Income-tax (Appeals) both in respect of disallowance of foreign travel expenditure of Rs.7,44,549/- and the interest disallowance of Rs.27,220/-. k) Being dissatisfied, the appellant has preferred this appeal before this Court. A Division Bench of this Court has formulated the following substantial questions of law for decision: &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal lay against such order before the Tribunal. According to Mr. Dutt, we should dismiss this appeal on that ground alone. Therefore, the first question that arises for consideration in this appeal is whether the order passed by the CIT (Appeals) reducing the addition to Rs. 27,200/- was based on consent. The letter dated February 21, 2003 written by the assessee to the CIT (Appeals) which is annexed at pages 108-109 of the Paper Book itself will indicate that the statement showing interest-free loan given to the subsidiaries during the Financial Year 1995-96 vis-à-vis deposits of sale collection in the cash credit account were furnished as desired by the said officer during appellate proceedings and such statement was made without prejudice to the submissions of the appellant. The said letter is quoted below: "The Commissioner of Income-tax (Appeals), &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerns. He stated that all the cash credit overdraft accounts of the banks and its sale proceed contain element of profits after providing for taxation, interest and other over heads. However, the A/R argued that at best an amount of Rs. 27,220/- can be disallowed in view of the fact that for certain periods debit balances were there in the account." From the aforesaid recording of submission, it is clear that there was no admission of the appellant of the liability but an alternative submission was made that at the most, the amount of Rs.27, 220/- could be disallowed. Thus, an alternative submission that at the most, the said amount might be disallowed if the main contention that entire amount should be deducted was not accepted cannot be said to be an admission on a question of fact. It is now settled law that if two alternative reliefs are claimed and the Court grants the alternative one by rejecting the first prayer, a litigant has a right to prefer an appeal for grant of the main relief. For instance, in a suit for specific performance of contract with alternative prayer of return of earnest money if the Court grants the relief of return of earnest money by refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the amount advanced on loan. As pointed out by a Division Bench decision of this court in the case of Woolcombers of India Ltd Vs. CIT (Appeals), Central Calcutta (supra), in a case where the assessee has overdraft account in the bank and the entire profits in the relevant year were deposited in the said account which was far exceeding the amount of advance tax liability and the money was withdrawn both for business purpose and payment of advance tax, there is a presumption that advance tax was paid out of profits and not out of overdraft account and disallowance of interest on overdraft account as being relatable to payment of advance tax was not justified. The same view has been taken in the case of British Paints (India) Ltd (supra) by another Division Bench of this Court. In the case before us, we find that the opening balance of such interestfree loans to the subsidiaries for the previous year ending on March 31, 1996 amounted to Rs.1 crore. During the previous year ended on March 31, 1996, the appellant advanced a further sum aggregating to Rs.7.30 crore to its subsidiaries and during the previous year ended on March 31, 1996, the appellant's cash profit after prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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