TMI Blog1989 (1) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... hire-purchase transactions were also entered into in the relevant years. The Income-tax Officer also found that even in the assessment year 1967-68, the assessee had almost stopped his business and was merely engaged in realising the outstandings due from his customers and also interest due from them. Inasmuch as the position continued to be the same for the assessment years in question, the Income-tax Officer took the view that the loss arising in the process of winding up should be appropriately dealt with under the head "Other sources" and he disallowed sums of Rs. 38,329 and Rs. 12,158. Amongst the items so disallowed, there were amounts paid as salary to one Sri Srinivasa Appa Rao, who was none other than the father-in-law of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or collecting arrears and outstandings, would not amount to carrying on of the business and the disallowance of portions of salary paid to Sri Srinivasa Appa Rao for the assessment years in question was justified. Regarding the claim of the assessee in respect of waiver of interest of Rs. 30,036 for the assessment year 1969-70, he held that it was not admissible, as no business was carried on by the assessee during the relevant year. On further appeal by the assessee before the Tribunal, it was contended that though the assessee did not make any fresh advance or enter into hire-purchase transactions during the relevant accounting years, yet, the assessee was collecting the outstandings due and that the salary paid to Sri Srinivasa Appa Rao ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome ?" Learned counsel for the assessee first contended that the view taken by the Tribunal that the assessee did not carry on any business during the accounting years relevant to the assessment years in question, is not correct and that though it may be true that the assessee did not make any fresh advance or enter into hire-purchase transactions, he had been realising the outstandings by institution of proceedings against the debtors of the assessee and that would be sufficient to establish that the assessee had been carrying on his business. Per contra, learned counsel for the Revenue submitted that the mere collection of outstandings cannot be termed to be continuation of business and placed considerable reliance upon the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o similar effect is the decision in Indraprastha Steel Industries Ltd. v. ITAT [1973] 88 ITR 138 (Delhi). There also, during the accounting period relevant to the assessment year 1967-68, the assessee did not make any purchases, nor did it spend any amount on purchase of stores and spares consumed and had no stock in possession, but it was realising its dues and earned interest on the outstandings from the purchasers of the machinery. Affirming the order of the Tribunal, the court held that merely because the assessee, during the relevant year, engaged itself in realising its assets and had earned interest, it cannot be said that it had engaged in any business. The principle laid down in the aforesaid decisions would squarely apply to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the disallowance made by the authorities is, in any manner, unreasonable or unfair. We now proceed to consider the claim for waiver of interest in a sum of Rs. 30,036 made by the assessee in respect of the assessment year 1969-70. We have earlier held that the business of the assessee had been stopped and that the assessee was making attempts to realise the outstandings. Further, it is seen that it was admitted before the assessing authority that no action at all had been taken by the assessee for the recovery of interest from the parties in respect of whom interest was waived as claimed. We are, therefore, of the view that the claim for allowance in sum of Rs. 30,036 towards waiver of interest for the assessment year 1969-70 has also t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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