Interest disallowance on interest-free advances to subsidiary companies followed an earlier binding view, favouring the assessee.

An identical reference on the disallowance of interest for advances made to subsidiary companies without charging interest had already been decided in favour of the assessee, and the High Court followed that binding view for the same assessment year issue. The Tribunal's deletion of the disallowance was therefore upheld, and the question was answered in favour of the assessee and against the Revenue.

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Issues: Whether the Tribunal was justified in deleting the disallowance of interest on advances made to subsidiary companies without charging interest, in a reference under section 256(2) of the Income-tax Act, 1961.

Analysis: The question referred arose from the assessment year 1983-84 and was stated to be identical to an earlier reference already decided by the Court in favour of the assessee. Following that binding view, the Court adopted the same approach for the present reference.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: Where an identical question has already been decided in favour of the assessee, the same conclusion governs the later reference on the same point.

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