9911796707
TMI Blog1999 (10) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... inal Petitions Nos. 13061 and 13720 of 1999 are in the list today. As Original Petition No. 20241 of 1999 is similar in nature, the same is being taken up at the request of learned counsel for the parties. A refusal by the Income-tax Appellate Tribunal, Cochin Bench (in short "the Tribunal"), to refer the questions posed by the Revenue for opinion under section 256(1) of the Income-tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances of the case, the Tribunal is right in law and fact in holding that there was a liability on the part of the assessee to pay interest to the parties concerned as at the end of the accounting year ?" The dispute has arisen in the following background : The assessee is a partnership firm engaged in the business of jewellery and as dealers in gold ornaments, silver ornaments and pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y which the value of the loan was taken at the rates prevailing as at the end of the year. This method was followed as per mutual agreement between the parties. The Assessing Officer was of the view that by paying interest on the artificial credit balances, the assessee had parted with a portion of its own commercial profit in favour of the relatives of the partners who are the persons who advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel for the assessee submitted that the assessee was bound by the agreement made. It was of the view that the arrangement made would be in its interest, and there is no question of any detriment to the assessee's business. The question whether a particular amount claimed was bona fide and/or was an attempt to affect the commercial profits is essentially one of fact. The first appellate au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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