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TMI Blog1976 (10) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... at unless Shri A returned the amount of Rs........ and odd to M/s. V. Pvt. Ltd., the assessee might not be able to recover its amount advanced to M/s. V. Pvt. Ltd. In the circumstances, the assesses decided to purchase actionable claims of Rs........ from Shri B a Receiver of the property of Shri A and incurred an expenditure of Rs....... in connection therewith. The assessee claimed this amount as a business expenditure which has been disallowed by the ITO. The ITO's observations in this behalf are found in para 2 of his order which reads as under: "The company claims to have incurred expenditure to the extent of Rs........... in connection with the tripartite agreement dt. 22nd Aug., 1972. A copy of the tripartite agreement and the reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. It is submitted before us by Shri Mehta for the assessee that the assessee is a money lender, that the amounts were advanced in the course of its money lending activities and that the expenditure of Rs.------ has been incurred by the assessee in connection with the recovery of the amounts advanced in the course of money lending business. The Departmental Representative has, on the other hand, strongly relied upon the orders of the ITO and the AAC to show that the amount in question was not spent by the assessee for the purposes of its business. 4. In order to appreciate the nature of transaction, we required the assessee to produce before us its balance-sheet for the year. It was found that the claim made by the assessee that the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment for delayed payment of tax on dividend distributed for the accounting year 31st March, 19971. The Departmental authorities disallowed the assessee's claimed by observing that income-tax was a liability which did not accrue to the assessee in the course of its business, and therefore, the interest paid thereon could not be treated as a liability in the course of assessee's business. It is submitted before us by Shri Mehta that the assessee's finances were blocked in its business and that the delay in making the payment of tax deducted out of dividend distributed occurred because of the financial stringency. According to Shri Mehta, the only alternative for the assessee was to dispose of some of its trading assets, pay the taxes and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that part of the order of the AAC where he held that no appeal lay against the levy of interest under s. 215 and under s. 139 of the Act. Shri Mehta has fairly admitted that all his contentions in this behalf have been considered by the Tribunal in a number of cases and that the Tribunal has, following the decision of the Gujarat High Court in the case of Sharma Construction(1) rejected his submissions. Since there is no new arguments advanced before us and all contentions of Shri Mehta have already been considered by the Tribunal in a number of cases, we hold that the AAC was justified in holding that no appeal lay against levy of interest under s. 215 and under s. 139. 8. The last effective ground in this appeal is against the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm capital gains (in assets other than land and building). 9. Inviting our attention to s. 74 of the IT Act, 1961 Shri Mehta has admitted that the section is silent about the adjustment. It is, however, contended that when the section is silent, it is a trite law that the assessee should be allowed to adjust brought forward capital loss in a manner that suits it most. The Departmental Representative has, on the other hand, relied upon the orders of the ITO and the AAC. 10. We have gone through the provisions of s. 74 of the IT Act, 1961. Shri Mehta is right in submitting that s. 74 in silent about such inter-se adjustment. Under the circumstances, we are in agreement with Shri Mehta that the assessee should be allowed to make adjustmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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