TMI Blog2009 (2) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... T The questions of law as framed in this appeal are as follows : "(a) Whether on the facts and circumstances of the case and in law, the hon'ble Tribunal was justified in deleting the disallowance made of Rs. 17,08,511 on account of interest expenses without appreciating the fact that the interest bearing loans obtained by the assessee from Canara Bank were diverted to settle the liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company vide lease deed datedJuly 1, 1989for a period of 12 years on a lease rent of Rs. 20,000 per month. However, no lease rent was paid by the assessee to the trusts nor was it provided for in the books of account. It was the case of the assessee that there was an oral understanding that no rent was to be paid. By a further agreement datedMay 26, 1993, these two premises were sub-leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of Bihariji International Ltd. The balance amount of the loan was allowed to the assessee to be withdrawn at the interest rate of 22.25 per cent. per annum. The assessee did not charge any interest from its sister concern Bihareeji International Ltd. 3. On the assessee's return for the assessment year 1997-98 the Assessing Officer concluded that the amount received from the bank had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an allowable expenditure. Reliance has been placed on several judgments including the judgment of the Supreme Court in the case of CIT v. Finley Mills reported in [1951] 20 ITR 475, as well as the judgment of this court in the case of Addl. CIT v. Putco Pvt. Ltd. reported in [1983] 140 ITR 740. It is seen that but for the borrowing of the funds, the assessee would not have been able to retain the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest of the lease premises and also to bail out its sister concern, the loan was obtained from the bank. It is a finding that the intention of the assessee was to safeguard its leased premises for the purpose of business and it cannot but be said to be in the interest of its business. 5. In our view, the findings are reasonable and cannot be said to be perverse and the questions of law as fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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