Sabyasachi Mukharji, J. - (1.) It appears that in this reference in respect of the relevant year the profits of the company before payment of taxes as per the profit and loss account was Rs. 1,06,62,415.00. The income returned by the assessee was Rs. 1,06,80,025.00. The income assessed by the ITO as per the assessment order appearing in the paper book was Rs. 1,08,05,310.00. The taxes that were paid by the assessee for the year were Rs. 73,32,054.00. The month-wise break-up appears to be as follows : JUDGEMENT_698_ITR135_1982Html1.htm
(2.) In the background of these facts which will appear from the order of the ITO in the instant reference for the assessment year 1971-72, it appears to us that, in view of the principles enunciated by us in I.T. Ref. No. 438 of 1975 (Woolcombers India Ltd. v. CIT), judgment delivered on 12th February, 1981, the question referred to this court, which is as follows : - "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the proportionate interest paid by the applicant on the amount utilised for payment of taxes out of the overdraft account is not an allowable deduction ?" must be answered in the negative and in favour of the assessee.
(3.) In the facts and circumstances of the case, the parties will pay and bear their own costs.;