SHETH TRADERS P LTD Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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(1.) THESE appeals are by the assessee pertaining to the assessment years 1979-80 and 1980-81. The point in issue in both the appeals is the same. So both the appeals were heard together and for the sake of convenience are being disposed of by a common order.
(2.) The assessee is a private limited company. The ITO for the assessment year 1979-80, while scrutinising the interest account found that the assessee has paid interest of Rs. 5,199 which included interest payment of Rs. 4,343 to Smt. Jiviben Himatlal Shah, wife of Shri Himatlal Shah. According to the ITO, the payment of interest of Rs. 4,343 to Smt. Jiviben Himatlal Shah attracts the provisions of Section 40A(8) of the Income-tax Act, 1961 ("the Act"). The ITO disallowed the claim on this expenditure to the extent of Rs. 651 only.
In the assessment order for the assessment year 1980-81 disallowance was made at Rs. 630.
(3.) BEING aggrieved with the order of the ITO, the assessee took up the matter in appeal. Before the learned Commissioner (Appeals), it was contended that Smt. Jiviben Himatlal Shah, who is wife of late Managing Director, Himatlal Shah, had not deposited any money in the company as contemplated under Section 40A(8) but credit to her account was given by virtue of her succession. Whatever the amount credited to the account of her husband was transferred to her account as his legal heir. Since the assessee had not received any amount by way of deposit, it was claimed that the provisions of Section 40A(8) of the Act were not attracted.;
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