2008 (12) TMI 325

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..... nterest-free withdrawal of around Rs. 21 lakhs during the previous year and on account of personal withdrawal by one of the partners, the firm was short of liquidity leading to higher incidence of debt and consequently interest liability. – Firm claiming that out of borrowings from firm partner acquiring land in his personal name but for business of firm - but the assessee did not produce any deta .....

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..... ) deleting disallowance of interest claimed by the firm amounting to Rs. 3,94,385. We have heard standing counsel appearing for the appellant and counsel appearing for the assessee. The total interest claimed for the assessment year concerned, namely, 1998-99, is around Rs. 60 lakhs. However, on verifying the accounts, the Assessing Officer noticed that one of the partners has made interest-free w .....

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..... tually correct, then there will be no justification for disallowance of interest because advances taken by the partner are utilised for firm and profit earned is enjoyed by the firm. However, the assessee did not produce any details about utilisation of advances retained by the partner for the purchase of property for the business purpose of the firm. In fact the Commissioner (Appeals) without ver .....

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