COMMISSIONER OF Income Tax vs FEJMAL RAJMAL CHHABRA.

We have heard the learned counsel for the Department as well as learned counsel for the assessee. The Commissioner has submitted this application for giving a direction to the Tribunal to draw up a statement of the case and to refer the following question of law for our opinion :

Whether on the facts and in the circumstances of the present case, the Tribunal was justified in holding that interest paid by the assessee to the minors on the gift made by the partners by mere book entries is to be allowed u/s 37(1) of the Income Tax Act, 1961 ?

We have gone though the judgment of the learned Tribunal, Bombay Bench, camp at Jaipur dated July 31, 1980, and also the order of the Tribunal, Jaipur Bench, dated February 9, 1981, whereby the identical reference applications filed by the Commissioner have been rejected. the Tribunal, on the facts and in the circumstances of the case, has held that there was no dispute that the amount in question was being used by the firm for the purpose of its business and the interest paid thereon represented expenditure incurred for the purpose of business in terms of section 37 of the Income Tax Act, 1961. The Tribunal as such allowed the expenditure as admissible u/s 37. In our view, it is a finding of fact that the amounts in question were being used by the assessee for the purpose of its business. We are thus clearly of the view that no question of law arises in the present case and the reference application having no force is dismissed.

The parties shall bear their own costs.