COMMISSIONER OF INCOME TAX Vs. MAITHREYI PAI

JUDGEMENT

(1.) THIS is a reference under s. 256(1). The question of law referred by the Income-tax Appellate Tribunal, Bangalore Bench is :

(2.) DURING the previous year relevant to the assessment year 1975-76, the assessee, an individual, sold shares of the value of Rs. 74,902 and returned capital gains of Rs. 28,402. The assessee claimed deduction of Rs. 30,478, being interest paid to M/s. MGA Pai & Sons on the money borrowed for the purchase of the shares.

(3.) THE main source of the assessee's income was by way of dividends on her shareholdings. THE assessee claimed deduction of Rs. 30,478, being the cost incurred for the acquisition of the shares. THE ITO did not allow the claim on the ground that the sum of Rs 29,116 was already allowed as an expense in computing the assessee's income from dividends in the assessment for the year and that a further deduction of interest paid was not called for.