TMI Blog1988 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as "the Act"), the Income-tax Appellate Tribunal has referred the following question of law to this court for its opinion : "Whether, on the facts and in the circumstances of the case, the interest payment of Rs. 93,837 on bank overdrafts was an allowable deduction in computing the income of the assessee ?" The material facts giving rise to this reference briefly are as follows The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est payment was allowable only for payment of income-tax and not for wealth-tax under section 80V of the Act. In this view of the matter; the Income-tax Officer held the allowable deduction to be Rs. 20,000 only. On an appeal filed by the assessee, the Commissioner of Income-tax (Appeals) affirmed the order passed by the Income-tax Officer in this behalf. The appeal filed by the assessee before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the overdrafts were taken by the assessee to meet his personal liability of payment of income-tax and wealth-tax. In these circumstances, as held by the Supreme Court in Padmavati Jaikrishna v. Addl. CIT [1987] 166 ITR 176, the dominant purpose of the assessee in taking overdrafts was not to earn income by way of interest or dividend but to meet the personal liability of payment of income-tax and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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