1. This reference raises a fairly short and simple question.

The assessee for the assessment years 1949-50 and 1950-51 had various sources of income and one of the sources of income was interest on fixed deposit. That income was assessable to tax under Section 12 as being an income from "other sources." In the year 1949-50, she received interest on fixed deposit in the sum of Rs. 2,256-0-0 and in the year 1950-51 she received a sum of Rs. 2,904-0-0.

Now, in these two years, she borrowed various sums of money for the purpose of meeting her household expenses, purchasing jewellery and meeting advance tax payment and she had to pay interest on these borrowings. In the year 1949-50, she paid Rs. 1,648-0-0 as interest and in the year 1950-51 she paid Rs. 2,530-0-0 as interest. The assessee claimed to deduct these two sums from the interest earned by her from her fixed deposit and her claim was based on Section 12(2) of the Indian Income-tax Act. The Tribunal has negatived her claim and the assessee has come on this reference.

2. Before we examine the facts, it is necessary, first, to turn to the section itself The deduction which is permissible under Sub-section (2) of Section 12 i