RAMANUJAM J.

At the instance of the Revenue the Income-tax Appellate Tribunal has referred the following two questions of law for the opinion of this court

"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that no interest under section 215 could be levied in the assessee's case for the assessment year 1971-72?

2. Whether, on the facts and in the circumstances of the case and having regard to the provisions of section 194A(3) of the Act, the Tribunal's view that tax is deductible at source under section 194A in the assessee's case and, therefore, there is no assessed tax as defined in section 215(5) on which interest could be levied is sustainable in law ?" *

The assessee in this case is the Madras Fertilisers Limited. For the assessment year 1971-72, the ITO has made an assessment on August 28, 1972, on a total income of Rs. 10, 28, 050. Out of this, a sum of Rs. 10, 51, 247 is the income by way of interest on dollar short-term deposit. The said interest has been received by the assessee on the surplus funds not immediately required which had been deposited for a short period with the Chemical Bank, New York. Anot