2001 PLP 749 (PTD)
H. H. MAHARAJA MARTAND SINGH JUDEO Versus COMMISSIONER OF INCOME‑TAX
| Citation | 2001 PLP 749 (PTD) |
| Forum / Court | 239 I T R 404 |
| Bench Members | A. K. Mathur, C.J. and S. K. Kulshrestha, JJ |
| Parties | H. H. MAHARAJA MARTAND SINGH JUDEO Versus COMMISSIONER OF INCOME‑TAX |
| Primary Law | Income‑tax‑‑‑ |
Q1: What are the key laws and sections cited in 2001 PLP 749 (PTD)?
This judgment primarily cites: Income‑tax‑‑‑ as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2001 PLP 749 (PTD)?
The case was heard and decided by the 239 I T R 404 bench comprising: A. K. Mathur, C.J. and S. K. Kulshrestha, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2001 PLP 749 (PTD) (H. H. MAHARAJA MARTAND SINGH JUDEO Versus COMMISSIONER OF INCOME‑TAX). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
‑‑‑‑Business expenditure‑‑‑Interest‑‑‑Money borrowed for paying income tax‑‑‑Interest on money borrowed is not deductible‑‑‑Indian Income Tax Act, 1961, S.37. Interest on money borrowed for payment of income‑tax is not an expenditure laid out wholly and exclusively for the purpose of business as contemplated by subsection (1) of section 37 of the Income Tax Act, 1961. East India Pharmaceutical Works Ltd. v. CIT (1997) 224 ITR 627 (SC) fol. H. S. Shrivastava for the Assessee. Abhay Sapre for the Commissioner.
Judgment & Decree
A. K. MATHUR, C.J.‑‑‑This is a reference under section 256(1) of the Income Tax Act, 1961, at tile instance of the assessee and the following question of law has been referred by the Tribunal for answer of this Court: "Whether, on the facts and in the circumstances of the case, the interest payment of Rs.3,18,203 on bank overdrafts was an allowable deduction in computing the income of the assessee?" The brief facts which are necessary for disposal of this reference, are that the assessee during .the financial year April 1, 1979, to March 31, 1980, relevant to the assessment year 1980‑81, derived income from interest from banks and private parties at Rs.1,67,338 and dividend income from Indian as well as foreign companies amounting to Rs.5,27,
146. The assessee paid interest to the banks to the extent of Rs.3,75,203 and claimed deduction of the same in computing the income from interest and dividends. The Income‑tax Officer allowed the deduction for only Rs.57,000 under section 80VV of the Income‑tax Act, relatable to interest on amounts withdrawn for payment of income‑tax and disallowed the balance of the claim. Thereafter, the matter was taken up in appeal and the appellate authority confirmed the order and ultimately the matter reached the Tribunal and the Tribunal also confirmed the order of the Income‑tax Officer on this issue. Hence, the assessee approached the Tribunal under section 256(1) of the Income‑tax Act for making the reference before this Court and accordingly, the Tribunal has referred the aforesaid question of law. This question has now been answered by their Lordships of the Supreme Court in the case of East India Pharmaceutical Works Ltd. v. CIT (1997) 224 ITR 627, and their Lordships of the Supreme Court while dismissing the appeal, held that the High Court was right in holding that the interest of Rs.28,488 on money borrowed for payment of income‑tax was not an expenditure laid out wholly and exclusively for the purpose of business as contemplated by subsection (1) of section 37 of the Income Tax Act, 1961. Hence, in this view of the matter, the view taken by the Tribunal is correct and this reference is accordingly answered in favour of the Revenue and against the assessee. M.B.A./231/FC Reference answered.