K P BROTHERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal (Delhi Branch) under Section 66 (1) of the Indian Income-tax Act. The following questions have been referred :

(2.) IF the answer to the first question is in the negative whether still the assessee firm is entitled to claim a deduction of the interest, credited in the two accounts under the; provisions of Section 10(2) (iii) of the Income-tax Act?

(3.) OUR answer to the first question is that in spite of the fact of there being only a cash balance of Rs. 603/-/- in the account books of the assessee firm, the debit entry of Rs. one lakh made to the account of Kishan Chand and the credit entries of Rs. 60,000/-/- and Rs. 40,000/-/-made to the accounts of Shri Mayaram and Shrimati Jasodhabai may operate as valid gifts.