TMI Blog1981 (9) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... reference, which is at the instance of the Commissioner of Income-tax and made by the Income-tax Appellate Tribunal Bombay Bench " D ", the following question of law stands referred to us : " Whether, on the facts and in the circumstances of the case, the Tribunal erred in allowing deduction of Rs. 21,117, being the interest paid by the assessee on the capital borrowed by it for the Thana projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reference we are concerned with an amount of Rs. 21,117 paid as interest by the assessee to the Bank of Baroda. It was admitted before the ITO that the Thana project had not gone into production. The ITO accordingly held that the " intermediates " business had not yet started. Accordingly, the ITO disallowed the interest paid to the Bank of Baroda. The assessee carried the matter to the AAC and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded as something different a totally independent venture unconnected with existing business of the assessee. It is clear that the AAC had totally misunderstood the ratio of the decision of this court in Calico Dyeing's case [1958] 34 ITR 265. Accordingly, the question referred to us is answered as follows: In our opinion, the Tribunal was right in allowing the deduction of Rs. 21,117. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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