9911796707
TMI Blog1997 (4) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,47,000 in respect of the borrowing from the Bank of India ("the bank") by the assessee's father. In order to meet his income-tax liability the assessee's father had, in his lifetime, borrowed certain amount from the bank and the said bank had granted overdraft facilities to the assessee's father. The amount that was advanced in the overdraft account was secured by the assessee's father by pledging with the bank various shares which he was owning at the relevant time. When the assessee inherited the properties from his father, he was also required it meet the liability which had accrued out of inherited assets and he was obliged to pay interest to the bank (on the amount outstanding in the overdraft account with the bank). The dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the claims of the secured creditor emanating (put of the overriding title in his favour, then the logical conclusion which follows is that these amounts did not form part of the real income of the assessee at all and they were required to be deducted before the chargeable income of the assessee could be computed for the relevant assessment years. Shri G. C, Sharma, learned senior counsel appearing for the Revenue, has urged that the view taken by the High Court is not in consonance with the law laid down by this court and has pointed out that the decision of the Gujarat High Court in Udayan Chinubhai v. CIT 111 ITR 584, [1978] on which reliance has been placed by the High Court in the impugned judgment, has been 222 ITR 456, wherein thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pledging of the shares was effected by the assessee's father to secure the loan advanced by the bank and it is not a case where the income from the shares had been charged with payment of interest payable on the loan. We find, merit in this contention. We may, in this context, refer to the decision of the Privy Council in Raja Bejoy Singh Dudhuria v. CIT [1933] 1 ITR 135. In that case there was a court decree under which the assessee was obliged to make a monthly payment of a fixed sum to his stepmother and his payment was declared a charge on the ancestral estate in the hands of the assessee. The judicial Committee of the Privy Council held that the decree of the court by charging the assessee's whole resources with a specific payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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