K.J. THOMAS Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) The judgment of the court was delivered by C. N. Ramachandran Nair J.-The common question raised in both the appeals is against the disallowance of interest in the computation of income from a theatre by name "Pandyan Theatre" in which the appellant was a partner. It is seen from the orders produced that the disallowance was made following an earlier order of the Tribunal. However, learned Counsel for the appellant contends that the disallowance of interest was made in the earlier year because the theatre was under construction. However, according to the appellant, the construction of the theatre was completed and the appellant started earning income during the previous year relevant to the two assessment years, viz., 1990-91 and 1991-92 against which these appeals are filed. It is seen that the interest paid is in excess of the income returned.

(2.) Consequently, the income from the firm is a loss and we see no reason why the appellant did not return a loss. In any case, the factual distinction stated by the appellant s counsel before this Court is not seen considered by the Tribunal. The appellant s computation statement of the income is also not available in the records. We do not think we can assume any facts which are not on record and decide the appeals if the factual basis on which the Tribunal disallowed the claim was wrong. It was for the appellant to have brought the facts on record at the time of argument before the Tribunal. We, therefore, leave open the said issue for the appellant to make a rectification application before the Tribunal, if the same is otherwise maintainable. However, since the time for making rectification application is over on account of the pendency of these appeals, the appellant is granted one month s time from the date of receipt of a copy of this judgment, to make a rectification application and if such an application is filed, the Tribunal shall entertain the same as one filed in time and dispose of the same on the merits.

(3.) Accordingly, we dismiss both the appeals on the common issue giving opportunity to the appellant to file rectification application.