SUHAS CHANDRA SEN, J. - (1.) THE Tribunal has referred the following three questions of law under s. 256(1) of the IT Act, 1961 to this Court for opinion : "1. Whether on the facts and in the circumstances of the case, the assessee was entitled to claim deduction of Rs. 4,77,974 in respect of the gratuity liability worked out on actuarial basis ? 2. Whether on the fact and in the circumstances of the case, the deduction of interest amount of Rs. 6,31,268 was rightly allowed under s. 57(iii) of the IT Act, 1961 ? 3. Whether on the facts in the circumstances of the case, the assessee was entitled to claim depreciation allowance on the Fork Lift Tracks at 30 per cent?"
(2.) SO far as the first question is concerned, in view of the decision to this Court, in the case of CIT vs. Eastern Spinning Mills Ltd. (1980) 19 CTR (Cal) 94 : (1980) 126 ITR 686 (Cal), it has to be answered in the affirmative and in favour of the assessee. There are two aspects of the second question. The first aspect of the question is whether the assessee company, having purchased the controlling interest in another company, was entitled to the deductions claimed. That question has been answered in favour of the assessee company in the case of CIT Model Manufacturing Co. (P) Ltd. (1980) 122 ITR 767(Cal). The second aspect of this question is to whether the interest on money borrowed for investment in shares which had not yield any dividend was admissible as deduction under s. 57(iii) of this IT Act. 1961, in computing its income from dividend under the head income from other sources. The Supreme Court in the case of CIT West Bengal III, Calcutta vs. Rajendra Prasad Moody (1978) CTR (SC) 141 : (1978) 115 ITR 519 (SC) has held that this was a deductible expenditure under s. 57(iii) of the IT Act, 1961. In view of the aforesaid the second question is also answered in the affirmative and in favour of the assessee.
(3.) SO far as the Third question is concerned, it appears that there is a circular issued by the CBTD dt. 13th Sept., 1973 being Circular No. 202/41/72-ITA II by which it has been clarified that the assessee was entitled to claim depreciation allowance at the rate of 30 per dent. In that view of the matter, the third question is also answered in the affirmative and in favour of the assessee.;