TMI Blog2001 (10) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... posed of by this common order. Pursuant to the directions given by this court under section 256(2) of the Income-tax Act, 1961 (in short the 'the Act"), the following question has been referred for the opinion of this court by the Income-tax Appellate Tribunal, Delhi Bench "A" (for short the "Tribunal"): "Whether, on the facts and circumstances of the case, interest paid by the association of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited by them with the assessee-association of persons and the assessee-assodation of persons had to borrow money from the bank to enable its members to withdraw a part of the amount standing to their credit in the books of the association of persons. The Assessing Officer held that the borrowings were not utilised for earning the taxable income and the interest paid by the assessee could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT [1965] 58 ITR 525 and Roopchand Chabildass and Sons v. CIT [1967] 63 ITR 166 and the Supreme Court decision in the case of Madhav Prasad Jatia v. CIT [1979] 118 ITR 200, in support of the disallowances. The Madras High Court decisions are primarily relating to the question of allowances or disallowances of interest under section 10(2)(iii) of the Indian Income-tax Act, 1922. The Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have been any income but that would not mean that the interest paid thereon can be said to be for the purpose of earning the income. To our mind, the Supreme Court decision is on all fours against the assessee. Therefore, we hold that the Appellate Assistant Commissioner was not justified in deleting the disallowance of Rs.7,728, Rs.1,068 and Rs.344 out of the interest in the three years und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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