1997 (8) TMI 43

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..... r section 256(1) of the Income-tax Act, 1961, referred by the Tribunal at the instance of the Revenue and the following question of law has been referred for answer of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the amount of Rs. 15,15,544 being interest on the loans from ICICI and IFCI utilised for setting up a new proj .....

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..... "Neco Valves and Pumps", which was not an expansion of the assessee's existing business. Aggrieved against the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax (Appeals) allowed the assessee's claim. Then the Department went in appeal before the Tribunal and the Tribunal after following the finding .....

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..... this categorical finding that the said capital was borrowed for expansion of the old business, the assessee is entitled for deduction under section 36(1)(iii) of the Income-tax Act. But the Assessing Officer has gone wrong by holding that the extended unit has not gone into operation. That is not decisive of the matter. The question decisive of the matter is whether this is an expansion of the ol .....

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