TMI Blog1993 (8) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 256(1) of the Income-tax Act, 1961, and the Tribunal has referred the following question to be answered by this court which is quoted as under : "Whether, on the facts and in the circumstances of the case, the learned Tribunal was legally justified in holding that the payment of interest amounting to Rs. 97,290 was allowable in terms of clause (iii) of sub-clause (1) of section 36 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owable in terms of clause (iii) of sub-section (1) of section 36 of the Income-tax Act, 1961. The assessee relied on the decision reported in the case of India Cements Ltd. [1966] 60 ITR 52 (SC), while the Revenue relied on the decision reported in the case of Ritz Continental Hotels Ltd. [1978] 114 ITR 554 (Cal). The Tribunal, in this regard, has found that the interest was allowable to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and that it is for the purpose of business that it borrowed the capital in question. That the capital in the present case has been borrowed for its business is not in doubt. Accordingly, we feel that the assessee's contention is correct and the disallowance of interest on the facts of the present case was not justified." Clause (iii) of sub-section (1) of section 36 is quoted as under: "Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0(2)(xv) of the Indian Income-tax Act, 1922, in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52 (SC). On the other hand, the decision relied on behalf of the Revenue is reported in Ritz Continental Hotels Ltd. v. CIT [1978] 114 ITR 554 (Cal), but the same is not applicable to the facts and circumstances of the present case. We further find that the decision of this court in Prem Spinning an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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