TMI Blog1984 (8) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... he family I hereby throw into the common hotchpot all my properties including the business into the joint Hindu undivided family mentioned earlier and I am managing the same. The business of the deceased which was held by him in his individual capacity was thus bequeathed to the HUF. Radhakrishnan, who is one of the surviving members of that family, entered into a settlement, in his capacity as the legal representative of the deceased, with the Income-tax Department, as evidenced by annexure dated February 2, 1972. That document shows that there was a dispute as to the extent of the income earned by the business of the deceased during the years 1957-58 to 1966-67. By the settlement dated February 2, 1972, the income of the business was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further appeal, the Tribunal held that the assessee was entitled to claim the amount as an admissible deduction to the extent that it related to the year in question. The amount thus allowed was Rs. 50,000. At the instance of the Revenue, the following question has been referred to us: " Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the assessee is entitled to the deduction of interest levied under section 220(2) of the Income-tax Act in respect of the tax arrears of the predecessor-owner of the business ? " The Tribunal has, in our view, lost sight of the fact that the assessment in question was not on the legal representative of the late Kumaraswamy Reddi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to the family of Radhakrishnan under the partition between himself and his brother. The assessment being on the family of Radhakrishnan, which is different entity, it has no nexus whatever with the liability discharged by Radhakrishnan as the legal representative of the deceased. The amount paid by the legal representative as interest is inadmissible as a deduction in the proceedings in question not merely because of the ban under s. 40(a)(iii), but fundamentally because it is unconnected with the business of the assessee and is, therefore, irrelevant to a, claim by the assessee under s; 37. In any case an amount paid under a statutory obligation cannot be taken into account in computing the business income. [ Indian Aluminium Co. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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