TMI Blog2000 (10) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... ally concluded by the CIT(A) s order dated 20-12-1978 for the assessment year 1975-76 ? 2. The applicant-assessee derives income from business in grains and cotton. He was assessed to income-tax for the assessment years 1976-77 to 1978-79. The ITO disallowed the interest of ₹ 35,595 for diversion of borrowed money to non-business purposes during the assessment pertaining to the assessment year 1976-77. In appeal before the Commissioner (Appeals), the order was confirmed. However, in appeal to the Tribunal, in respect of the addition of ₹ 25,752 on the ground of diversion of borrowed funds to Trilokchand Ghanshyamdas, the Tribunal set aside the order of the ITO as also of the Commissioner (Appeals) and directed the ITO to re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India v. Kamlakshi Finance Corpn. Ltd. [1991] 55 ELT 433 in support of his contention that once the Commissioner (Appeals) had, in the assessment year 1975-76, held that the borrowed funds had not been diverted for the purchase of agricultural lands, the disallowance could not be made, the Assessing Officer was bound by the said direction while making assessment in respect of the allowance of interest claimed in the subsequent assessment years. The learned counsel has also referred to the decision of the Allahabad High Court in CIT v. Kamla Town Trust [1992] 198 ITR 191 1 as also to the decision of the Supreme Court in Indian Eastern Newspaper Society v. CIT [1979] 119 ITR 9962 in support of his contention that such departure cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a dealer in jute, had claimed that on 12-7-1943, he had made a gift of ₹ 5,11,101 to his brother and another sum of ₹ 2,50,000 to his nephew and both of them had then started a new firm dealing in jute and, at about the same time, the assessee had stopped his business. The Tribunal had not accepted that the gifts were genuine for the assessment years 1945-46 and 1946-47 and ultimately the Supreme Court had also refused to interfere with that finding. However, in the subsequent years on the basis of the material placed by the assessee where the question again came up for consideration before the authorities, the Tribunal, after taking into consideration the decision rendered by the Tribunal in the previous proceedings, came to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated the income derived as purely agricultural income but from the subsequent year of assessment, it was held that the said income from the sale of forest trees of spontaneous growth without the intervention of human agency, was not agricultural income exempted from the Indian Income-tax Act, 1922. The assessment of this income to the tax was challenged, inter alia, on the ground that since in the earlier year of assessment the income was treated as exempted, it was not permissible for the assessing authorities to treat it differently in the subsequent years. It was observed that each year is a separate self-contained period of time for purposes of assessment and the opinion of the AAC made in connection with the previous assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that loans from bank were utilised for purchase of agricultural land was in any way erroneous. It is, therefore, clearly on appreciation of the facts brought on record in the assessment year in question that the Tribunal has arrived at the conclusion that borrowed funds were utilised for the purchase of agricultural lands and the amount representing the interest on such amount as was utilised for this purpose, has been disallowed. 9. The learned counsel has placed strong reliance on the decision of the Supreme Court in Kamlakshi Finance Corpn. Ltd. (supra) but in the said case, the question before the Supreme Court was whether the strictures passed by the High Court against the two Assistant Collectors for not following th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessing authority can on the material placed before it, take a different view in the subsequent years although the findings in the earlier years on the same subject-matter can be considered as cogent evidence. In view of the facts taken into consideration by the Tribunal with regard to the diversion of the borrowed funds in purchase of the agricultural lands of which the income was not ploughed back in the account of the firm as admittedly the agricultural income, as per books of account of the assessee s firm, was distributed amongst the partners and not utilised for reducing the loan utilised for non-business purposes, the Tribunal in no way erred in maintaining the disallowance upheld by the Commissioner (Appeals). We, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
