G ANITA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS application under S. 256(2) of the IT Act, 1961 at the instance of the assessee, seeks reference of the following two questions arising out of the order in R.A. No. 624/Hyd/1996:

(2.) THESE questions concern and touch upon the disallowance of interest of Rs. 70,000 paid to G. Balakrishna, husband of the assessee. It was claimed that the assessee borrowed funds from him individually and in his capacity as HUF and interest was credited. The assessee claimed that she has taken over the liability of her husband to Satya Traders, of which the assessee is partner, through a letter authorising to debit her account with them and give credit to her husband. However, the same was rejected consistently holding that the entire set of transaction was a device to reduce tax liability of several taxable entities. In view of the above findings arrived at which touch upon exclusively factual appreciation and no question of law as such is involved or arises, there is no warrant to refer the above questions as contemplated under S. 256(2). The ITC is, therefore, rejected. No costs.