COMMISSIONER OF INCOME TAX Vs. INSOTEX PRIVATE LIMITED

JUDGEMENT

(1.) THE following question at the instance of the Revenue has been referred by the Income-tax Appellate Tribunal under s. 256(1) of the I.T. Act, 1961 :

(2.) THE facts are correctly stated in the statement of the case and may now be briefly summarised as follows :

(3.) THE Revenue challenged the order of the AAC in an appeal before the Income-tax Appellate Tribunal. It was urged before the Tribunal that the decision of the Supreme Court in Challapalli's case (1975) 98 ITR 167, would be applicable to the facts of the case and not the decision of the Bombay High Court in Calico Dyeing and Printing Work's case (1958) 34 ITR 265. But the Tribunal did not agree with that contention. It observed that it was not the case of the Revenue that the assessee has started a new venture. It was admittedly a running concern and since the borrowed capital was used for the purpose of purchasing machinery and land, the assessee would be entitled to the benefit under s. 36(1)(iii) of the Act.