TMI Blog1961 (11) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... in the particular facts of the case, the amount of ₹ 13,500 is properly disallowable from and out of the assessee's claim for interest payment in respect of its borrowals in the year of account ? The assessee is a Hindu undivided family carrying on business on an extensive scale with a capital of nearly ₹ 20,00,000 (twenty lakhs). During the year ended 9th November, 1950, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the conclusion that the assessee could claim this deduction as it was the interest paid on capital borrowed for the purpose of business. This is what the Commissioner says : Out of ₹ 93,611, interest paid on capital borrowed, ₹ 13,500, was disallowed as interest on amounts withdrawn specifically to meet personal expenses. The appellant had withdrawn during the accounting year &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight to withdraw sums of money even out of its borrowings. However, on the request of the Commissioner, the Tribunal referred the question set out above under section 66(1) of the Indian Income-tax Act. It is urged on behalf of the department by Sri Kondiah that the interest paid on any borrowing made for the personal use of the family would not enable the family to claim deduction out of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregating to ₹ 1,77,984 from the business. It is not a case where any particular sum purporting to be borrowed on behalf of the business was spent for household expenses. This is a case where the loans were taken for carrying on the business but the family used to withdraw some amounts from the business whenever occasions arose. The family was surely entitled to withdraw from the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the expenditure in question was unconnected with the income she had earned on her fixed deposit, she could not have recourse to section 12(2). It is only when a connection is established between the expenditure and the earning of the income that an assessee would be entitled to relief under section 12(2). That ruling does not render any assistance to the department. In our opinion, no excepti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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