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TMI Blog2005 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 - Judge(s) : R. K. AGRAWAL., RAJES KUMAR. JUDGMENT The Income-tax Appellate Tribunal, New Delhi, has referred the following question of law under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this court: "Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was justified in confirming the deletion of Rs. 1,81,000 being disallowance of interest?" The present reference relates to the assessment year 1984-85. Briefly stated the facts giving rise to the present reference are as follows: The respondent-assessee has been assessed to income-tax in the status of a company. During the assessment year under consideration, it had advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has been adopted by the appellant even in the preceding year where it has been accepted. Even in the succeeding year such plea of the appellant has been accepted. There is no dispute over the fact that the appellant has taken the overdraft facilities for the purpose of business. The position being so, no part of the interest can be disallowed in view of the decision of the Madras High Court in the case of CIT v. Pudukottai Co. P. Ltd. reported in [1972] 84 ITR 788. A similar view has been taken by the Madhya Pradesh High Court in the case of D H Secheron Electrodes P. Ltd. v. CIT reported in [1984] 149 ITR 400, where the facts of the case were that the Income-tax Officer disallowed part of the interest paid by the assessee on the capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 9,70,000 surplus and reserves Rs. 50,75,000 (Rs. 50,75,000) Rs. 60,45,000 (b) Interest-free advances M/s. Godawari Sugar Mills Rs.17,80,000 Polymech Sugar Mills Rs.82,20,000 Total Rs.1,00,00,000 The above interest-free advances were at the close of the relevant accounting year. In the beginning of the said year, the interest-free advances were as follows: M/s. Polymech Sugar Mills Rs 33,00,000 M/s. Godawari Sugar Mills Rs.17,00,000 Total Rs. 50,00,000 If at all it is to be considered that the assessee has interest-free advances to its sister concern, reasonable presumption that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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