G L DIDWANIA Vs. MINOO K BHAGWAGAR

JUDGEMENT

(1.) APPELLANT has suffered a dismissal of the suit as wellxas the first appeal. This is notwithstanding the fact that the respondent was ex-parte at the trial. In the second appeal I am to answer the following question of law:-

(2.) WE also hereby formally acknowledge receipt from you on 21st august,2002 of a State of Accounts showing, inter alia, the interest paid by us to date, and also, your perceptions of the amount purported to be due to you - namely, on the basis of "compounding" of interest on a monthly basis, on the original term deposit or "bridging loan" of Rs. 10,00,000/- (as the case may be ). (Refer Annexure 'a' to earlier letter of 29th August,002 ). We also confirm having received from you certain additional financial instruments/documents (DPN, Receipt etc. etc.) on which you desire us to affix our signatures in token of the additional interest burden payable to you by us, etc. While we emphatically and categorically deny the net total amount payable to you as contained in your Statement of Accounts dated 21st august,2002, it is noted, that as per your own such Statement of accounts, you do also confirm having already received from us during ay 2002-2003, a sum of Rs. 2,10,000/- (Rupees Two Lakhs Ten Thousand only) as interest payment (namely, income from other sources ). Please also be informed that, as per advice tendered,

(3.) YOUR specific attention is also drawn to the provisions of Section 269t of the IT Act whereby repayment of loan or deposit together with or without interest (or where interest along exceeding Rs. 20,000/-) are to be made by either an account payee cheque or by an account payee bank draft. In case of non-compliance with this provision, a penalty equal to the amount of the loan or deposit (as the case may be) so repaid will be leviable under Section 271e of the IT ACT. Keeping the above in mind we seek your instructions, or otherwise, to deposit, as per the provisions of the IT Act, a sum of Rs. 52,872/-immediately in the Government Treasury as TDS on the interest accrued and paid to you during the AY 2002-2003 against the term deposit/loan, as the case may be. Additionally, a sum of Rs. 2,10,000/- (Rupees Two lakhs Ten Thousand only) has, as per advice, been set aside as a provision for further contingencies as per the provisions of Section 27 1e of the IT Act.