VIMLA SIDDHARTHBHAI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question has been referred for the opinion of this Court :

(2.) SO far as the latter part of the reference i.e. whether interest paid to Taral and Swati was deductible under S. 57(iii) of the IT Act, 1961 (hereinafter referred to as "the Act") is concerned, the point is concluded against the assessee in Smt. Padmavati Jaikrishna vs. Addl. CIT (1987) 62 CTR (SC) 14 : (1987) 166 ITR 176 (SC) : TC 41R.622. Hence, to that extent, the question must be answered against the assessee and in favour of Revenue.

(3.) MR . Shah, the learned Advocate for the assessee, raised various contentions. He submitted that the underlying object of the provisions of S. 80V of the Act has been totally ignored by the Tribunal. He further, submitted that even if two interpretations are possible, the interpretation which would advance the object of the Act must be accepted. If the contention of the Revenue is upheld and the decision of the Tribunal is confirmed, the entire object behind enacting such benevolent provision would be defeated and frustrated. It was also submitted that a similar provision regarding grant of exemption is found in S. 24(1)(vi) of the Act under which deduction is granted in respect of income from house property. Central Board of Direct Taxes (CBDT) issued a circular dt. 20th Aug., 1969 wherein it is provided that the income chargeable under the head of "income from house property" be computed after making certain deductions. Sec. 24(1) reads :