JUDGMENT :

Ruma Pal, J.

The subject-matter of the dispute in this appeal relates, to the interpretation of Section 5 of the Interest-tax Act, 1974 (the Act) which reads thus :

"Subject to the provisions of this Act, the chargeable interest of any previous year of a credit institution shall be the total amount of interest (other than interest on loans and advances made to other credit institutions) accruing or arising to the credit institution in that previous year.

Provided that any interest in relation to categories of bad or doubtful debts referred to in Section 43-D of the Income Tax Act shall be deemed to accrue or arise to the credit institution in the previous year in which it is credited by the credit institution to its profit and loss account for that year or, as the case may be, in which it is actually received by the credit institution, whichever is earlier."

2. The questions which had been referred to the High Court for its decision were :

(1) Whether, on the facts and circumstances of the case, on account of incorporation of Section 145 of the I.-T. Act, 1961 with effect from 1-10-1991 the Section 21 of the Interest Tax Act, 1974 and the overriding effect of Section 21 over S