9911796707
TMI Blog1980 (12) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ring industrial detergents, etc. the Department's common objection pertains to the deletion by the AAC of addition of Rs. 5,000 for the asst. yr. 1976-77 and Rs. 5,500 for the asst. yr. 1977-78 on account of disallowance of interest. The ITO found that the assessee had, as in the past, borrowings from bank and other parties and it has also given loans and advances to others. He noticed heavy withd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration and when so considered, it was apparent that though the assessee had substantial funds it chose to borrow moneys from Bank and other parties to make advances to its business customers, while the surplus funds were utilised for withdrawal by the partners for their personal purposes. It is, therefore, submitted that in the circumstances the disallowance made by the ITO is justified and sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss purposes, there is absolutely no justification for sustaining the disallowance in support of which strong reliance was placed on the decisions in CIT vs. Gopikrishna Muralidhar 47 ITR 469, Kishinchand Chellaram vs. CIT 1977 CTR (Bom) 694 : 1978 114 ITR 654 (Bom) and CIT vs. Bombay Samachar Ltd. (1969) 74 ITR 723 (Bom). The Deptl, Rep. submitted that the decision in 74 ITR 723 (Bom) is distingui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he only test to be applied is as to whether the borrowing is for the purpose of the assessee's business or not. On these, the undisputed finding is that the borrowals were for the purpose of assessee's business and have actually been utilised therefore. The genuineness of the borrowing not being and its utilisation for the purpose of business not being disputed, we are unable to uphold the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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