1. The Income-tax Appellate Tribunal, Chandigarh Bench, have referred the following question of law for our opinion :

"Whether, on the facts and in the circumstances of the case, the interest of Rs. 6,733 was a permissible deduction as a revenue expenditure?"

2. The assessee is a private limited company. It manufactures woollen cloth and carpets. These items are also exported out of India. Tn the year 1966-67, the assessee could not pay the provisional demand of tax in respect of earlier assessment and approached the Income-tax Officer for time which was allowed. In respect of these delayed payments, the assessee was charged interest and he paid a sum of Rs. 6,733. This payment of interest has been claimed by the assessee as permissible deduction under Sections 37 and 36(1)(iii) of the Income-tax Act, 1961. The Income-tax Officer disallowed this claim and held that the assessee was not entitled to claim it as a permissible deduction under the Act.

3. On appeal before the Appellate Assistant Commissioner, a claim was made that the Income-tax Officer was wrong in not allowing the amount of interest paid as a permissible deduction. This contention was rejected by the Appellate