TMI Blog1984 (11) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant assessment year is the assessment year 1962-63 for which the accounting period ended on December 31, 196 L. In the course of assessment, the Income-tax Officer disallowed a claim for deduction of interest on account of loans taken for purchasing certain securities floated by the Government of Orissa. This claim was ultimately upheld by the Tribunal. Mr. Naha, appearing on behalf of the Revenue, has contended that the interest paid on moneys borrowed for the purchase of the securities could not be allowed as deduction under section 19(ii) of the Income-tax Act, 1961, inasmuch as the assessee did not have any income chargeable under the head " Interest on securities ". There was no question of computation of any income under the he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Rs. 999 under the head 'Income from other sources '. But if there is no income, then, on the argument of the Revenue, the expenditure would have to be ignored as it would not be liable to de deducted. This would indeed be a strange and highly anomalous result and it is difficult to believe that the Legislature could have ever intended to produce such illogicality. Moreover, it must be remembered that when a profit and loss account is cast in respect of any source of income what is allowed by the statute as proper expenditure would be debited as an outgoing and income would be credited as a receipt and the resulting income or loss would be determined. It would make no difference to this process whether the expenditure is X or Y or nil ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of making any investment and the language of section 19(ii) required the moneys to be borrowed " For the purpose of investment in the securities ". Our attention was drawn to a judgment of this court in the case of Phillips Carbon Block Ltd. v. CIT [1982] 136 ITR 205, where the court went into the meaning of the word " investment " in a case under section 84 of the Income-tax Act, 1961. This question whether the assessee bought the securities by way of investment or otherwise was not raised before the Tribunal. It is really question of fact. What was the intention behind the purchase could only be gone into and decided by the Tribunal. Mr. Naha has contended that this is only another aspect of the question that has already been rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
