Deduction for interest on delayed sugarcane cess and purchase tax upheld on the strength of an earlier assessee ruling.

Interest paid for delayed payment of sugarcane cess and purchase tax was treated as deductible in computing business income, because the section 256(1) question was identical to an issue already decided in the assessee's own case. The earlier ruling had allowed the deduction, and that view was followed again. The reference was therefore answered in favour of the assessee and against the Revenue.

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Issues: Whether the assessee was entitled to deduction in the computation of its business income of the interest paid for delayed payment of sugarcane cess and purchase tax.

Analysis: The question referred under section 256(1) of the Income-tax Act, 1961 was identical to one previously decided in the assessee's own case. The earlier decision had held the issue in favour of the assessee and against the Revenue, and the same view was followed.

Conclusion: The assessee was entitled to the deduction, and the reference was answered in favour of the assessee and against the Revenue.

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