the high companyrt held that interest on the part of the borrowed money used at lpoh was rightly disallowed as a deduction because the business which was being taxed was the business at madras and number the business at ipoh.
appeal by special leave from the judgment dated numberember 9 1960 of the madras high companyrt in t. c. number 41 of 1959.
the question referred to it was the following whether on the facts and circumstances of the case the bank was entitled to claim the deduction of the entire interest paid by it on fixed deposits either under s. 10 2 iii or 10 2 xv ?
the judgment of the companyrt was delivered by sikri j. this is an appeal by special leave against the judgment of the madras high companyrt answering a question referred to it under s. 66 1 of the indian income tax act 1922 hereinafter referred to as the act against the revenue.
the respon dent the indian bank limited madras hereinafter referred to as the assessee carried on the business of banking.
in the numbermal companyrse of its business it received deposits from constituents and paid interest to them.
the appellate assistant companymissioner and the income tax appellate tribunal disallowed interest amounting to rs.
civil appellate jurisdiction civil appeal number 1095 of 1963.
it bought and sold these securities and the profits and losses on the purchase and sale of such securi ties were duly taken into account in companyputing the income of the assessee under the head business.
for the assessment year 1951 52 accounting year calendar year 1950 it claimed a deduction of rs.
the income tax officer.
venkatram and r. gopalakrishnan for the respondent.
v. gupte solicitor general k. n. rajagopala sastri h. dhebar and r. n. sachthey for the appellant.
at the instance of the assessee the appellate tribunal referred the question reproduced above to the high companyrt.
it invested a large sum in securities both of the central and state governments including mysore government .
the relevant facts and circumstances are these.
