JUDGMENT BY THE COURT : This is an IT reference under s. 256(1) of the IT Act, 1961 at the instance of Revenue and the following question of law has been referred by the Tribunal for answer by this Court : "Whether under the facts and in the circumstances of the case and in law, the Tribunal was justified to hold that the assessees claim of deduction of interest on term loan was of allowable nature ?" 2. The assessee is M.P. Audyogik Kendra Vikas Nigam (Raipur) Ltd., Raipur. It is a Government undertaking. The assessee had claimed certain collection charges and contingent expenses from its constituents. The same was to form part of the receipt of the assessee. Similarly, the assessee charged interest on its term loans from its constituents and same also formed part of receipts. Assessee had shown these receipts in its books and filed the returns accordingly. However, subsequently, the Government of Madhya Pradesh by notifications dt. 11th February, 1986 and 29th July, 1986, disapproved the assessees collection charges/contingent expenses and interest on term loans were also not allowed to be charged to the works account. On the basis of above stated two notifications, the assessee made adjustments in the books reversing the entries and filed revised returns for earlier years. The AO found that since the accounting adopted by the assessee was disapproved after the close of the accounting year, he held that the liability accrued after the accounting period; and as such, the adjustments claimed for asst. yr. 1986-87 was not allowable. The assessee filed an appeal before the CIT(A). The CIT(A), while allowing the deduction on account of interest on term loans, observed that the assessee made the claim prior to the completion of assessment and since the interests was paid on the loans borrowed for the activities for which the Nigam was set up by the Government and since the Nigams proposal for reimbursement of interest had been turned down the liability to pay interest to the banks had already accrued in the earlier years and thus was allowable. The Department did not accept the decision of the CIT(A) and preferred further appeal before the Tribunal. The Tribunal upheld the order of the CIT(A) and dismissed the Departments appeal. Hence, the Department approached the Tribunal for referring the aforesaid question of law for answer by this Court. The Department did not accept the decision of the CIT(A) and preferred further appeal before the Tribunal. The Tribunal upheld the order of the CIT(A) and dismissed the Departments appeal. Hence, the Department approached the Tribunal for referring the aforesaid question of law for answer by this Court. The Tribunal has referred the matter for this Courts opinion. We have heard the learned counsel for parties and perused the record. 3. Though the question has not been properly framed but it relates to deduction of interest on term loan and whether it is allowable. It was not permitted by the AO on the ground that the same had been filed after filing of the return. But this technical objection did not find any favour before the appellate authority as well as Tribunal. We are of the opinion that the view taken by the CIT(A) and Tribunal is justified. In the present case, it is the Government undertaking and Government orders were subsequently received by the public undertaking not approving the interest on term loans and accordingly the assessee public undertaking informed the ITO before the assessment could be processed. There was no reason to have ignored the subsequent decision of the Government being brought to the notice of the assessing authority and the assessment by that time was not finalised. 4. In view of the above, the view taken by the CIT(A) and the Tribunal is justified and we answer this question against the Revenue and in favour of the assessee.