TMI Blog1998 (3) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... erred the following, question along with the statement of the case for our opinion : "Whether the Tribunal misdirected itself in law in admitting that the unpaid sale price could be treated as borrowed capital within the meaning of clause (vi) of sub-section (1) section 24 of the Income-tax Act, and in that view whether the Tribunal was justified in holding that the assessee was entitled to dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gether with interest thereon to the vendor company. In appeal before the Tribunal, the Tribunal has taken a view that the assessee is entitled to deduction of interest paid to Badridas Keshav Prosad on Rs. 3,50,000 borrowed for purchasing house and he is also entitled to deduction of all interest paid to the vendor on the balance of the purchase price and is further entitled to deduction of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 8 per cent. per annum. Thereafter, the assessee further borrowed the amount from Badridas Keshav Prosad for payment of the unpaid price of the house and also interest due thereon. The Income-tax Officer did not allow any interest on the subsequent borrowed money. However, the Tribunal has allowed the interest on the initially borrowed money, i.e., Rs. 3,50,000, and also allowed the interest on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he house property. When the facts are not in dispute that the total cost of the house was Rs. 11,50,000 and Rs. 3,50,000 was paid after borrowing the said amount from Badridas Keshav Prosad the interest on that borrowed capital has been allowed. Subsequently, the assessee has further borrowed an amount for payment of the balance amount of unpaid purchase price, i.e., Rs. 8 lakhs. How the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and against the Revenue. So far as whether the Tribunal was justified in holding that the assessee was entitled to deduction of all interest paid to the vendor company on the balance purchase price as well as interest to Badridas Keshav Prosad on such sum borrowed subsequently for payment of principal sum of unpaid purchase price to the vendor company is concerned, we answer it in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
