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TMI Blog1984 (8) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 57(iii) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to the allowance of bad debt of Rs. 94,402 or any part thereof ? 3. Whether, on the facts and in the circumstances of the case, the assessee is entitled to the allowance of Rs. 3,801 against business income ? " Assessment year 1969-70 " 1. Whether, on the facts and in the circumstances of the case, the interest of Rs. 35,000 paid to Shri K. J. Somaiya is allowable against dividend income under section 57(iii) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to the allowance of bad debt of Rs. 2,200 or any part thereof ? " We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing allowed deduction of this interest. This was on the basis that the interest was not paid for acquiring any income earning asset but for acquiring an asset which was meant to be immediately donated to a charity. That the assessee had this intention can be gathered from the circumstances and particularly bearing in mind the very short time interval between the acquisition of the assets and its donation to the charitable trust. This is precisely the basis on which the Tribunal disallowed the claim of the assessee. If we peruse the provision of s. 57 of the I.T. Act, 1961, we find that the view of the Tribunal is borne out by the phraseology employed and, in our opinion, there is little that can be urged against either the approach or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led, to give information which had been sought for. This is set down by the Tribunal in the following passage: "If the assessee had conducted money-lending business, it could have certainly informed us as to what was the total capital in the said business, what was the extent of loans taken from outside parties, what was the total interest paid by the assessee, whether it owned a money-lending licence or whether it advanced funds only to traders, what was the extent of rolling of the circulating capital and such other relevant factors. No such evidence has been produced before us. The only material before us is that the assessee invested considerable amounts in purchase of shares and the interest paid on these advances was claimed against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction. Thus, as far as question No. 3 for the assessment year 1968-69 is concerned, the assessee would be entitled to succeed in respect of an amount of Rs. 1,374. Accordingly, we propose to answer the questions as under: Assessment year 1968-69 : Question No. 1: In the negative and in favour of the Revenue. Question No. 2: In the negative and in favour of the Revenue. Question No. 3: The assessee was entitled to allowance of Rs. 1,374 only against its business income. Assessment year 1969-70 : Question No. 1: In the negative and in favour of the Revenue. Question No. 2 : In the negative and in favour of the Revenue. The assessee has substantially failed and must pay the costs of the reference to the Commissioner. Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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