Dismissing the appeal of the revenue the Court held that, since the assessee had specific exemption from the Ministry of Finance, Government of India there was no liability to deduct tax at source on the payment made by it towards interest on the foreign currency loan taken by it. S.  40(a) was not attracted. The exemption given to the assessee by the Government had not been revoked or withdrawn on any such contingency at any point of time. Even if the foreign currency loan in question was utilised to repay the domestic loan taken as working capital loan earlier and employed by the assessee for industrial development the exemption given by the Government would not be lost. Therefore, the additions made under S.  40(a) were rightly deleted by the appellate authorities. ( AY.2000-01)