TMI Blog1976 (11) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ended on September 30, 1970. The assessee had an overdraft account. Receipts were deposited in this account and payments including taxes were also made from this account. The Income-tax Officer found that part of the amount drawn from the overdraft account had been used for payment of taxes. He also found that it was not practicable to ascertain what part of the earlier receipts had been utilise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). It was held in this case that payment of income-tax was not a part of the expenditure of an assessee. Therefore, interest paid by the assessee on any sum borrowed for the payment of taxes, is not deductible from his income. All the relevant provisions of the Act relating to deduction had been considered in this judgment. The Tribunal, on the basis of this judgment, disallowed the interest of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73] 90 ITR 373 (Punj) and also Commissioner of Income-tax v. Calcutta Landing and Shipping Co. Ltd. [1970] 77 ITR 575, 583 (Cal). Dr. Debi Pal, appearing for the assessee, has argued before us the following points: (1) The expression "for the purpose of business" in section 36(1)(iii) of the Income-tax Act, 1961, is wider in its scope than the expression "for the purpose of making or earning t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 40(a)(ii), any sum paid on account of rate or taxes levied on the profits or gains of any business or profession or assessed at a proportion or otherwise on the basis of any such profits or gains, have also been excluded. There is no express exclusion in respect of interest paid on borrowed sum for payment of advance taxes. This shows that such interest is deductible. (5) Section 80V of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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