TMI Blog1983 (1) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... e following two questions are referred : " 1. Whether, on the facts and in the circumstances of the case, the claim of the assessee in respect of interest amounting to Rs. 7,517 is allowable under section 36(1)(iii) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the payment of Rs. 1,000 as municipal taxes is an allowable deduction for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement, the assessee was liable to pay municipal taxes at the maximum rate of Rs. 200 per year, and the liability accrued every year. As the account books of the assessee were on mercantile basis and not on cash basis, the ITO allowed the claim of allowance to the tune of Rs. 200 only and disallowed the claim in respect of the earlier period. The AAC and the Tribunal upheld this order. Shri De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as that the capital borrowed by the assessee from outsiders was used by the assessee for the purposes of the business and that no part of the borrowed capital had been utilised for the purposes of advancing loans to any component of the company. Moreover, the statement, annex. A, was not filed before the ITO. It is not possible to ascertain the facts mentioned in annex. A in isolation without exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent of Rs. 200 accrued every year. Under these circumstances, the fact of actual consolidated payment for five years in the relevant assessment year does not entitle the assessee to claim the entire deduction in one year. Consequently, question No. 2 is also answered in the negative and in favour of the Revenue. The assessee to bear the costs of this reference. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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