VIJAYAKUMAR MILLS LTD Vs. INSPECTING ASSISTANT COMMISSIONER

JUDGEMENT

(1.) The following question has been referred to this court by the Income-tax Appellate Tribunal at the instance of the Revenue :

(2.) An identical question came up for consideration before this court in two earlier decisions one in Addl. CIT v. Madras Fertilisers Ltd., [1980] 122 ITR 139 and the other in T. C. No. 611 of 1979 judgment dated April 19, 1984 CIT v. Seshasayee Paper and Boards Ltd., [1985] 156 ITR 542, wherein this court has held that the interest paid on its borrowal for the purpose of the business is deductible from the interest earned on its investments made out of the borrowed funds, and that question was answered in the negative in the said cases. Following the decisions rendered in those cases, we answer the question in this case in the negative and in favour of the Revenue.

(3.) No costs.