Commissioner of Income Tax vs Ashok Kumar Mehra

The petitioner seeks reference of the following question :

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in holding that the interest paid on the bank loan raised for repaying the loan taken earlier from the firm qualified for deduction under sub-section (3) of section 67 of the Income Tax Act as interest paid for loan taken for capital contribution ?"

The facts as found by the Tribunal are that the assessed had sold some jewellery and had made deposits with the bank. Against the said deposits, a loan was taken which was invested in the business. A claim was made with regard to the interest paid on the loan so taken and that interest has been allowed as deduction u/s 67(3) of the Income Tax Act.

The Tribunal found as a fact that the loan had been taken by the assessed and this formed the capital which was invested in the business. The answer to the question proposed, on the facts as found, is self-evident and no question of law arises. Dismissed.