COMMISSIONER OF INCOME TAX Vs. WESTERN INDIAN STATE MOTORS

JUDGEMENT

(1.) THIS is a reference under section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue to answer the following question of law, namely :

(2.) THE only point involved for decision is covered by the decision of the Supreme Court in Mahalakshmi Sugar Mills Co. v. CIT, 1980 123 ITR 429. Following that decision of the Supreme Court in respect of the same assessee, this court, for an earlier year of assessment, has held that the interest paid by the assessee to the sales tax department on arrears of sales tax is an admissible deduction under section 37 of the Income-tax Act, 1961 (See CIT v. Western Indian State Motors, 1987 167 ITR 95).