COMMISSIONER OF INCOME TAX Vs. AUTOKAST LTD.

JUDGEMENT

(1.) The question for answer is as follows :

(2.) In the reference order itself decisions in favour of the assessee as well as in favour of the Revenue are specified.

(3.) The factual matrix presents no difficulty whatsoever. The assessment year is 1985-86. Shorn of all unnecessary details, we are concerned with the assessee borrowing from the Industrial Development Bank of India Ltd., (IDBI) Bombay, an amount of rupees three crores which was left in deposit with the State Bank of Travancore, till the assessee found it necessary to use the said amount either in the purchase of plant and machinery or in installing them or in running its establishment. Some portion of this amount was also deposited with the Chartered Bank, Cochin. With the help of the bank, the assessee became a member of the bill market which fetched considerable income in the accounting year. Various such deposits earned income by way of interest in regard to which an amount of Rs. 5,05,711 got accumulated along with the above deposits which were borrowed as stated above by the assessee from the Development Bank.