9911796707
TMI Blog2012 (12) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the declared amount of Rs.2,78,070/-. The addition was made in a sum of Rs.1,14,983/- which was claimed as interest paid by the appellant to the depositors. It was disallowed on the basis that the maximum rate of interest payable under the Kerala Money Lenders Act is 14%. The amount which was disallowed represents the amount paid in excess of the legal limit. The appeal carried by the appellant was unsuccessful in regard to the amount disallowed on account of the excess payment of interest. The Tribunal has affirmed the said view. Accordingly the appellant is before us. 3. We heard the learned counsel for the appellant and the learned counsel for the Revenue. 4. The learned counsel for the appellant would submit that the Tribunal act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of smuggling: it was a loss in much the same way as if the currency notes had been stolen or dropped on the way while carrying on the business. It was a loss which sprang directly from the carrying on of the business and was incidental to it and its deduction had to be allowed under S.10." 5. On the strength of the said judgment, the learned counsel for the appellant would contend that even where the income was found to be illegal, it was held that loss could be claimed as a deduction. If the income is tainted and he is forced to pay the tax, he poses the question as to how it could be held that the amount which is paid in excess of the legal limit under the Money Lenders Act should not be allowed to be deducted from the income. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would point out that there was no similar explanation in regard to Section 10 of the Income-Tax Act, 1922. He would further contend that this is not a case where the business conducted by the appellant could be said to be illegal as such. What is involved is applying the terms of the explanation to the facts of the case which is what has been done by the Tribunal. 8. We would think that there is no merit in the appeal. The assessment year in question is 1996-97. Therefore, the assessment is to be made under the Income-tax Act, 1961. By virtue of the Finance Act, 1998, Explanation stands inserted in Section 37 with effect from 01/04/1960. This means that a deduction could not be claimed in respect of the year 1996-97, if it is an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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