S.J. VAZIFDAR, J.

This is an appeal against the order of the Tribunal confirming the order of the Commissioner of Income Tax (Appeals) enhancing the appellant/assessee’s income. The appeal pertains to the Assessment Year 1997-98. The Assessing Officer had disallowed interest of Rs.9,45,675/- out of the total claim of interest of Rs.18,91,335/-.

2. By an order dated 29.10.2007, the appeal was admitted on the following substantial questions of law:-

“i. Whether under the facts and circumstances of the case the interest on money borrowed for investment in shares in M/s M. Gulab Singh & Sons (P) Ltd. which had not yielded any dividend is admissible deduction?

ii. Whether under the facts and circumstances of the case, Tribunal is justified that the shares have been purchased by appellant to acquire controlling interest and hence not allowable deduction?”

3. The assessee had claimed a deduction of Rs.18,91,335/- on account of interest paid to the Ashok Kumar Malhotra HUF. Ashok Kumar Malhotra is the assessee’s husband and the assessee is a member of the said HUF. The assessee claimed that she had borrowed funds from the HUF during the Assessment Year 1987-88 to purchase shares of M/