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TMI Blog1997 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ear in question is 1983-84. The assessee claimed a sum of Rs. 1,25,000 as permissible deduction under s. 5(k) and Rs. 2,18,461 under s. 5(e) of the Act. Out of the sums so claimed, a sum of Rs. 2,26,939 has been disallowed. 2. The Tribunal has held that interest can only be claimed under s. 5(k); that merely because a part of the amount claimed as interest cannot be allowed under s. 5(k), the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowing is deductible under s. 5(k) or s. 5(e) or not at all. 5. Sec. 5(k) deals with any interest paid in the previous year on any amount borrowed and actually spent on the land from which the agricultural income is derived. The proviso requires the assessee to establish the borrowing being genuine having due regard to the assets of the assessee at that time, and limits the deduction to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th under s. 5(k) and not under s. 5(e). The ceiling on the amount of interest that can be claimed as deduction, is applicable in respect of all borrowings spent on the land from which the agricultural income is derived. 9. Deduction can be claimed under s. 5(e) in respect of interest paid on borrowings, only when such borrowing does not fall within the ambit of s. 5(k). No claim can be made und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the land from which agricultural income is derived, that could arise for consideration under s. 5(e). 11. This necessarily requires examination of the purpose of the borrowing, the need for the borrowing and the manner in which the amount so borrowed is utilised. It is after such examination that the assessing authority will be in a position to decide as to whether the interest claimed as de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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