9911796707
TMI Blog1983 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to pay any interest. It was her own capital which was used in the business. She, however, did not charge any interest on the advances made to Shri Vishwanath Prasad Didwania, her father-in-law and Didwania Industries in which her husband and father-in-law were interested as partners. The ITO was of the view that since she was carrying on money-lending business and was maintaining her account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not taxable as income accrued to him. The Madras High Court in CIT v. Motor Credit Co. (P.) Ltd. [1981] 127 ITR 572 had observed as under: "... Where no income has resulted, it cannot be said that income has accrued merely on the ground that the assessee has been following the mercantile system of accounting. Even if the assessee makes a debit entry to that effect, still no income can be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as if she had withdrawn the amounts to the extent they had been advanced to her father-in-law and Didwania Industries out of the money-lending business. A somewhat similar situation had arisen in the case of Sir Kika Bhai Premchand v. CIT [1953] 24 ITR 506 (SC). In this case the assessee was a dealer in silver and shares. He maintained his accounts according to the mercantile system and valued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re form. 4. In view of the above authorities, we hold that no income had accrued to the assessee as interest on the advances made by her to Vishwanath Prasad Didwania and Didwania Industries and, therefore, none could be brought to tax in her hands in either of the above assessment years. We, therefore, delete the additions of Rs. 12,000 in both the above assessment years. 5. In the result, bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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