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Issues:
1. Deductibility of interest on borrowed capital under section 36(1)(iii) of the IT Act, 1961. 2. Allowability of expenditure of Rs. 4,740 for the business of the assessee. 3. Contingent nature of liability of Rs. 19,952. Analysis: 1. The Tribunal referred the question of whether the sum paid as interest on borrowed capital was deductible under section 36(1)(iii) of the IT Act, 1961. The Tribunal accepted the assessee's case, stating that all requirements of the provision were met. The High Court upheld this decision, considering it a factual finding without any reason to doubt its correctness. Therefore, the deduction of interest was allowed in favor of the assessee against the Revenue. 2. The second issue was the deductibility of an expenditure of Rs. 4,740 for the business of the assessee. The Tribunal concluded that the expenditure was indeed incurred for business purposes. The High Court deemed this finding as a factual matter that must be accepted. Consequently, the deduction of the expenditure was allowed in favor of the assessee against the Revenue. 3. The final issue revolved around the contingent nature of a liability amounting to Rs. 19,952. The Tribunal analyzed the circumstances and found that the liability was not contingent, as the assessee had made provisions for it earlier. The High Court concurred with the Tribunal's finding, emphasizing the details of the lease agreement and the actions of the assessee regarding the liability. As a result, the liability was deemed non-contingent, and the claim of the assessee was allowed against the Revenue.
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