9911796707
TMI Blog1981 (8) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... Sir Shadilal Sugar and General Mills Ltd., Mansurpur, Muzaffarnagar (hereinafter referred to as " assessee-company "), in its assessment to income-tax for the assessment year 1964-65, the previous year ended on September 30, 1963, claimed deduction of a sum of Rs. 29,347 as loss incurred in transactions in Govt. securities. The ITO, on the view that the assessee-company does not deal in Govt. sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see from the District Magistrate, Muzaffarnagar, that the assessee subscribed to the U.P. State Development Loan, 1974, to the extent of Rs. 6,50,000. On receipt of the aforesaid letter, the assessee directed its bankers, the Punjab National Bank, on September 20, 1962, to debit its account by the aforesaid amount and arrange to keep the loan in its cash credit account against Govt. securities. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st at the instance of the road transport authorities and for that purpose it borrowed moneys at 10% interest. Investment was made to keep the road transport authorities in proper humour under the belief that it was necessary to carry on its business. Subsequently, the assessee sold the, bonds at a loss of Rs. 3,127 and claimed this amount as a business loss. The ITO and the AAC disallowed the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee-company in the present case. The Govt. bonds certainly carried interest at 4 1/2% and the amount was subscribed by the assessee from its cash credit account. There is nothing on the record to show as to at what rate the assessee was paying interest on the loans taken against the cash credit account. Thus, there was no compelling necessity whatsoever for selling the Govt. securities, before th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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