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TMI Blog2000 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... at the instance of the Revenue under section 256(1) of the Income-tax Act, 1961. The questions of law referred are as follows : "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in deleting the disallowance of Rs. 6,72,000 out of the claim of interest on borrowings ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the firm is not in a position to divert funds to its partners without the deposit collected has yielded a total amount of Rs. 7,46,143 by way of interest on borrowed funds. Hence, he disallowed an amount of Rs. 6,72,000 being interest on funds diverted by partners. The appeal filed by the assessee was allowed and against that before the Tribunal, the Assistant Commissioner of Income-tax, Ernak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC), to bring the point that the Assessing Officer can under the proviso to section 145 look into the accounts. The Assessing Officer can even where the accounts are correct and complete to the satisfaction of the Assessing Officer but the method employed is such that, in the opinion of the Assessing Officer, the income cannot properly be deduced therefrom, then he can compute the income on such b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision In CIT v. A. Krishnaswami Mudaliar [1964] 53 ITR 122 (SC); Sundaram and Co. Ltd. v. CIT [1959] 36 ITR 162 (Mad) and CIT v. British Paints India Ltd. [1991] 188 ITR 44 (SC) contends that even if in the same system of accounting, the Assessing Officer can exercise the power under the proviso when he finds that the method of accounting is not proper. We may not be able to answer the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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