1At the instance of the Commissioner of Income tax, Trivandrum, the Income tax Appellate Tribunal, Cochin Bench, referred the following questions to this Court for decision:
1. Whether, on the facts and in the circumstanaces of the case, the Tribunal was right in holding that the statutory deduction under S.36(1) (viii) of the LT. Act 1961 has to be calculated on the total income before deduction of the amount allowable under S.36(1)(viii)? (Assessment years 1975-76 and 1977-78).
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest which had accrued to the assessee on the balance amount due from M/s. Malabar Spinning and Weaving Mills Co. Ltd., was not includible in the income of the assessee? (Assessment years 1976-77 and 1977-78).
3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure incurred by the assessee on the investigation, research and feasibility study is a revenue expenditure to be allowed as a deduction? (Assessment years 1976-77 and 1977-78).

2The matter arises out of the income tax assessment on the respondent for the assessment years 1975-76, 1976