9911796707
TMI Blog1979 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... mber 31, 1960. The assessee had advanced a sum of Rs. 1,46,614 to All India Finance and Commerce Ltd. (hereinafter referred to as the " debtor company "). It is common ground that the amounts advanced were bearing interest at 12% per annum. For the assessment year 1961-62, the assessee-company included in its income-tax return interest in respect of outstandings due from the debtor company only in respect of a period of 6 months, i. e., a period up to August 31, 1960. No interest for the rest of the accounting year was taken into consideration. It appears that in the course of the previous year the debtor company had acquired 4,799 shares out of the total of 4,950 shares in the assessee-company, with the result that the assessee-company bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inance and Commerce Ltd. In that view of the matter, in our opinion, interest was certainly payable on the proportionate value of the debt viz. (1,46,614 X 15)/4950 by the All India Finance and Commerce Ltd. to the assessee. The Income-tax Officer will calculate that proportionate interest and bring to tax only that amount instead of Rs. 6,000 in question." It is at the instance of the Commissioner that the question already set out has been referred to this court for decision. The view taken by the Tribunal is clearly untenable. Though the assessee might have become the subsidiary of the debtor company they are separate corporate entities. There is no legal warrant for the apportionment which the Tribunal has done, after coming to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of interest subsequent to August 31, 1960,as a purely notional income and he relied upon several decisions to support a contention that such notional income should not be assessed. The arguments addressed by the learned counsel are, no doubt, interesting but we are afraid that they travel far beyond the scope of the reference in the present case. The Tribunal has decided the appeal before it on a very short ground. The conclusion of the Tribunal is that a portion of the assessable income is taxable. It means that the plea put forward on behalf of the assessee that the agreement to pay interest had come to an end on August 31, 1960, and that there was no accrual of interest thereafter, has been rejected. The assessee has not taken out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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