PACKART P LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the applicant-assessee the following question has been referred to this Court for its opinion under the provisions of S. 256(1) of the IT Act by the Tribunal, Ahmedabad Bench-B :

(2.) LEARNED advocate Shri B.D. Karia has appeared for the applicant-assessee whereas learned senior Central Government standing counsel Shri B.B. Naik has appeared for the Revenue.

(3.) THE learned advocates have fairly submitted that the question which has been referred to this Court has been answered by this Court in the judgment delivered in the case of Saras Pur Mills Ltd. vs. CIT (1997) 137 CTR (Guj) 591: (1997) 226 ITR 533. Moreover, it has been submitted that in principle, the Supreme Court has also decided in the case of East India Pharmaceutical Works Ltd. vs. CIT (1997) 139 CTR (SC) 372: (1997) 224 ITR 627 (SC) that such interest paid by the assessee would not amount to business expenditure and, therefore, such an expenditure cannot be allowed.