1991 (1) TMI 106

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..... ons have been referred by the Tribunal under section 256(2) of the Income-tax Act, 1961, for our opinion : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in allowing the claim of the assessee in respect of interest paid to M/s. J. K. Woollen Manufacturers Ltd. ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was jus .....

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..... ii) where the property is subject to a mortgage or other capital charge, the amount of any interest on such mortgage or charge. (iv) where the property is subject to an annual charge (not being charge created by the assessee voluntarily or a capital charge), the amount of such charge." It is evident from a reading of these two clauses that clause (iii) which permitted any amount paid by way of i .....

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..... ned herein cannot be said to be voluntary because "it had to be created absolutely in the interest of the business when it was being carried on." We are afraid that even a mortgage created for such purpose cannot be called an involuntary transaction. It would still be a voluntary transaction. No one mortgages his property except when he is in need of whatever kind ; on that account, it cannot be s .....

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