MAHESH G. SHETTY, DR. G.P. SHETTY, SRI. DINESH G. SHETTY AND SMT. NAGALAKSHMI SHETTY REP. BY HIS GPA HOLDER DR. G.P. SHETTY Vs. THE COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following substantial questions of law arise for our consideration.

(2.) THESE appeals are filed by the Appellants -Assessees challenging the orders of the Income Tax Appellate Tribunal by common order dt. 19.9.2008.

(3.) THE returns of the Appellants -Assessees came to be selected for scrutiny for the assessment year 1995 -96. Accordingly, the Notice under Section 143(2) of the Act came to be issued and the assessing officer passed orders of assessment by allowing the Assessees's claim and set off the interest against other taxable income and concluded the same. However, the order of the assessment officer came to be selected for the review under Section 263 of the Act by the Commissioner of Income Tax Karnataka -I on the ground that the assessment was prejudicial to the interest of the revenue. On 29.12.99 orders came to be passed by the Commissioner of Income Tax who directed the assessing officer to disallow the interest paid en borrowed capital invested in the partnership firm and also directed the assessing authority to ascertain the actual amount of borrowed funds which were invested by the Appellants in partnership firm.