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TMI Blog2004 (3) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... ly ground raised in the appeal relates to the disallowance of interest amounting to Rs. 21,250. 2. In the course of assessment proceedings, it was observed by the AO that a sum of Rs. 2 lakhs was withdrawn by two partners from their respective capital accounts with the assessee-firm and had invested it in another firm known as Vadilal Sons. The assessee-firm then borrowed funds immediately fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned counsel was that the impugned amount of Rs. 2 lakhs was withdrawn much earlier in the accounting year relevant to asst. yr. 1987-88. It was pointed out that in asst. yr. 1987-88, no such disallowance was made. In asst. yr. 1988-89, though the CIT(A) had sustained the disallowance, no second appeal was preferred by the assessee because of smallness of the amount. In any case, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on record. There is no allegation by any of the lower authorities that the monies borrowed by the assessee-firm were not for the purpose of business. When it is not disputed that the monies were borrowed for business purpose, there is no reason to disallow the interest paid thereon unless it is proved that the transaction is not genuine. There is also no allegation from any of the lower authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did make a disallowance which was confirmed by the CIT(A) but second appeal was not preferred by the assessee because of smallness of the amount. In asst. yr. 1989-90, i.e., the year under consideration, the Department has again made the disallowance. Suffice it to say that consistency should be the hallmark in the case of the same assessee from year to year unless there are strong reasons to devi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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