SUPREME COURT OF INDIA

Before:- D.P. Wadhwa and S.S.M. Quadri, JJ.

Civil Appeal No. 1940 of 1993. D/d. 1.2.2000.

Commissioner of Income-tax, Hyderabad - Appellant

Versus

Gopal Bansilal Inani - Respondent

Income tax - Deduction - Interest - Interest payments made to coparcener on the amount lent by them to the H.U.F - Whether ITAT was justified in directing the income-tax Officer to deduct interest payments - Court answer the question in negative, in favour of revenue and against the assessee.

[Paras 1 to 3]

Cases Referred :-

Commissioner of Income-tax, Andhra Pradesh v. Venu Inani, Hyderabad, (1998) 9 SCC 657.

Income-tax Officer, Calicut v. N.K. Saroda Thampatty, 1991 Suppl (2) SCC 737.

JUDGMENT

D.P. Wadhwa, J. - This appeal is directed against the judgment dated November 28, 1990 of the Division Bench of the Andhra Pradesh High Court under Section 256(2) of the Income Tax Act, 1961 refusing to direct reference of the following question of law for its consideration :

"Whether on the facts and in the circumstances of the case, the ITAT was justified in directing the Income-tax Officer to deduct interest payments made to the coparceners on the amounts lent by them to the H.U.F.?"

2. Since answer to the question is covered by the decision of this Court, we set aside the impugned judgment of the High Court and treat this question as deemed to have been referred for answering in accordance with law.

3. Following the decision of this Court in Commissioner of Income-tax, Andhra Pradesh v. Venu Inani, Hyderabad, (1998) 9 SCC 657 and Income-tax Officer, Calicut v. N.K. Saroda Thampatty, 1991 Suppl (2) SCC 737 we answer the question in negative, in favour of the Revenue and against the assessee. The appeal is disposed of accordingly. There shall be no order as to costs.

Order accordingly.