1999 (2) TMI 2

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..... 1973, determining the loss as Rs. 78,823. A sum of Rs. 78,500 claimed as interest paid by the assessee on the amounts borrowed for purchase of machinery was allowed as a deduction. Similarly, for the year 1973-74, in the original assessment deduction was allowed for similar interest paid by the assessee. While making the assessment for the assessment year 1974-75, the Income-tax Officer noticed th .....

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..... machinery being a business asset, the interest paid on the amount borrowed for the purchase of such machinery would certainly be an allowable deduction. Consequently, the Tribunal upheld the claim of the assessee and permitted the deduction being made. The Revenue applied to the High Court under section 256(2) for directing the Tribunal to make a reference to it on the following question : "Whet .....

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