1. S. K. DESAI, J.-In this reference, which is at the instance of the Commissioner of Income-tax and made by the Income-tae Appellate Tribunal Bombay Bench "D", the following question of law stands referred to us "Whether, on the fads and in the circumstances of the case, the Tribunal erred in allowing deduction of Ra. 21,117, being the interest paid by the assessee on the capital borrowed by it for the Thana project in computing the income of the assessee for the assessment year 1968-69 ?"
2. The acompany is a private limited company engaged in the manufacture of dyestuffs. We arc concerned with the assessm ent year 1968-69 for which the corresponding accounting year is the year ended 31st March, 1968. The assessee-Company had started a new industrial undertaking (hereinafter described as "Thana Project--- for manufacture of dyes (inter--mediates) for which purpose it had already purchased land at Thana. The factory building was under construction and the machinery was uncle- installa--petition. The new project was for the purpose of manufacture of dyes (interme--diates) required for the manufacture of dyestuff's. Them intermediates were hitherto purchased by the assessee-Company in the market.
3. The assessee, thereafter, came in second appeal to the Tribunal. The Tribunal observed that the facts of the present case wee; fully covered by the decision in Calico Dyeing's case.
4. Accordingly, the question referred to us is answered as follows :-- Parties to bear their own costs of the reference.