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TMI Blog1997 (8) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest to the purpose referred to in sections 5(k) and 5(e) of the Act. He allowed in accordance with the second proviso under section 5(k) of the Act after calculating nine per cent. of 25 per cent. of the agricultural income for the year, the income for the year being Rs. 14,08,573. The assessing officer had allowed that sum and the Assistant Commissioner, on appeal, affirmed it. The Assistant Commissioner also allowed a sum of Rs. 1,78,882.02 as interest under section 5(e) of the Act. He arrived at that figure of Rs. 1,78,882 after apportioning the expenditure for the year of assessment, for the purposes specified under sections 5(e) and 5(k). He found that this sum of Rs. 1,78,882 represents the interest paid on the borrowings falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particular head to the total expenditure.... The details of expenditure which would come under sections 5(k) and 5(e) have been provided by the assessee as seen from the statement filed before the Assistant Commissioner." Learned counsel for the assessee contended that the Tribunal was in error in holding that the allocation of expenditure incurred in the year of assessment was applicable to the earlier years when the borrowing was actually effected, and that the entire amount of the interest paid on the arrears of the unpaid loan should be allowed under section 5(e) of the Act. Section 5(k) of the Act deals with interest paid in the previous year on any amount borrowed and actually spent on the land from which the agricultural inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded as loans obtained and spent on the land from which the agricultural income is derived, the deduction was allowed to the extent permissible under section 5(k) of the Act. The amount which could not be considered under section 5(k) barring the amount disallowed, has been allowed under section 5(e). We do not find any illegality in the method so adopted. The assessing authority had of necessity to adopt a workable method for determining the interest paid on the outstanding loan allowable as a deduction and allocating the same under sections 5(k) and 5(e), as the assessee did not furnish all the necessary particulars regarding the manner in which the moneys had been expended in the earlier years from out of the loans still outstanding. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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