TMI Blog1999 (4) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... s made to the extent of Rs. 3 lakhs on July 4, 1979, and Rs. 2 lakhs on February 20, 1980. While the advance was entered in the assessee's cash book, the repayment was credited in the bank account maintained by the assessee for recording its transactions with its foreign principal, namely, Jugolinija Rijeka, Yugoslavia. But, the assessee pleaded that the advance of Rs. 5 lakhs was free of interest. But, the evidence of one of the partners is that interest was paid on several dates during the periods 1979 to 1980. The pronote also stipulates rate of interest. The Income-tax Officer cross-verified with the foreign principal and found that the advance was not confirmed by the foreign principal and found that interest to the extent of Rs. 67,79 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at the business premises of the assessee ? 2. Whether, the Tribunal's conclusion that there was no firm evidence to show that the assessee had been in receipt of interest of Rs. 67,790 from Mohd. Ismail and Company, is reasonable and sustainable in law on the basis of materials available on record ?" During the search conducted by the Department at the business premises of the assessee on May 20, 1980, it has been revealed that the assessee paid an advance of Rs. 5 lakhs to Mohd. Ismail and Company, on a pronote dated March 15, 1979, and obtained interest of Rs. 67,790 from that firm and the assessee did not disclose either the advance or the repayment or the receipt of interest in its accounts. A pronote executed by Mohd. Ismail and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, but vehemently contends that no interest was received. That contention cannot stand for a moment because, even the pronote seized from the assessee-company's premises clearly indicates that the assessee had advanced Rs. 5 lakhs to Mohd. Ismail and Company for interest at the rate of 44 paise per thousand rupees per day. Even though the assessee's accounts do not reveal any receipt of interest with regard to this amount, the entries found in the books of Mohd. Ismail and Company had clearly disclosed the payment of interest to the assessee-company. Those entries which have been made in the normal course of business must be accepted as true. A partner of that company has also indicated periodical payment of interest on five different da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohd. Ismail and Company on five different dates and not on a single date. Simply because the assessee's accounts do not reveal the receipt of interest, it cannot be concluded that there was no receipt of any interest by the assessee-company. The entries in the account books of Mohd. Ismail and Company would suffice to satisfy with regard to receipt of interest of Rs. 67,790 by the assessee. So the receipt of interest of Rs. 67,790 is includible in the assessment of the assessee for the assessment year 1980-81. The Tribunal has committed an error in deleting the addition of interest of Rs. 67,790 made by the Income-tax Officer in the assessment of the assessee. We answer both the questions in favour of the Revenue and against the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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