Satish Chandra, J.

1. THE Tribunal has referred the following questions of law for our opinion :

"1. Whether, the Appellate Tribunal was right in its finding that the normal allowance referred to in Explanation 1 under Machinery and Plant in Appendix I-5(1) relating to Rule 5 of the I.T. Rules, 1962, refer to the normal depreciation actually allowed and not to the hypothetical figure of normal depreciation had the machinery and plant worked for a period of 180 days or more and accordingly the plant and laboratory equipments are entitled to only a proportion of the actual allowance ?

2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was legally justified in holding that the sum of Rs. 2,85,733 formed part of the actual cost of the assets of the assessee and accordingly entitled to depreciation and development rebate on such actual cost?"

2. THE second question, learned counsel for both the parties are agreed, is covered by the decision of the Supreme Court in Challapalli Sugars Ltd. v. CIT [1975] 98 ITR 167. The figure of Rs. 2,85,733 mentioned in question No. 2 represented interest paid by the company for moneys borrowed for purposes of pur