Commissioner Of Income Tax vs Dharam Singh Babek Singh
1987 Latest Caselaw 34 Del

Citation : 1987 Latest Caselaw 34 Del
Judgement Date : 19 January, 1987

Delhi High Court

Commissioner Of Income Tax vs Dharam Singh Babek Singh on 19 January, 1987

Author: S Chadha

Bench: S Sapra, S Chadha

JUDGMENT

S.S. Chadha, J.

1. The questions of law proposed in this application under s. 256(2) of the IT Act, 1961 for the asst. yr. 1977-78 are in the following terms :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the interest payment of Rs. 1,94,310 is not disallowable as for non-business purposes ?

2. Whether, the findings of the Tribunal that the assessed has discharged its onus of proving that the entire interest bearing loans had been taken by the assessed for business purposes is not contrary to the facts on records ?"

2. The Tribunal declined to draw a statement of case as in its opinion, no question of law arose. Our attention is invited to the order of ITO that the assessed-firm during the calendar year 1976 had taken interest bearing loans of Rs. 5 lacs from M/s. Needle Rollers Bearing Co. Pvt. Ltd. on which interest of Rs. 29,609.50 was paid and Rs. 10,000 from M/s. B. Amir & Associates to whom interest of Rs. 277 was paid and had the funds of the firm been not blocked up in advance to the partners and their relatives the assessed would not have resorted to borrowings and incurred the liability of payment of interest. The ITO found that out of the loan of Rs. 10,000 raised, the assessed paid bill of electricity of Rs. 2,767.30 of 15-A, Friends Colony, New Delhi, the house belonging to Smt. Harnam Kaur and Smt. Amarjit Kaur. It has been pointed out by Mr. Anoop Sharma that these were the observations at the time of draft order. The ITO himself found that the two transactions referred to in the draft order do not by themselves go to support the ultimate conclusion by the ITO as observed by the IAC. In the order of the Tribunal, it is recorded that "ITO has stated himself that on the basis of the two borrowers made in the relevant previous year, it could not be concluded that borrowed funds had been diverted to non-business use". This is a pure finding of fact. No question of law arises. Dismissed.