The question before the High Court was when  the AO having resorted to Section 147 of the Act  whether he is bound to compute business income after allowing statutory deduction including under section. 43B in respect of the interest paid to financial institutions. Allowing the claim the court held that  the expression “assess” used in s. 147 refers to a situation where assessment of income of an assessee for a particular year is, for the first time made by resorting to the provisions of S. 147 because the assessment had not been made in a regular manner under the Act. The expression “reassess” refers to a situation where an assessment has already been made but the ITO has, on the basis of information in his possession, reason to believe that there has been under assessment on account of existence of any of the grounds contemplated by the provisions of S. 147(b). Reference may be had in this regard to the provisions of S. 147 itself. Since there was no original assessment proceeding and no assessment order, therefore, the question of reassessment does not arise. The orders passed by the AO were the assessment orders passed on original and revised return and claims made by the assessee during the assessment proceedings and, as such, the interest paid to financial institutions/banks being an allowable expenditure under S. 43B was bound to be allowed. Interest paid by the assessee during the assessment year in question was an allowable expenditure under S.  43B. The expenditure claimed by the assessee was rejected by the AO and upheld by the Tribunal on a misconceived ground that it could not have been claimed or allowed in reassessment proceedings whereas the fact was that the order passed by the AO was not a reassessment order but an assessment order pursuant to the original and revised return filed by the assessee and claims made during assessment proceedings. Followed, Karnataka State Cooperative Apex Bank Ltd. v. Dy. CIT (2021) 323 CTR 730 / 207 DTR 351 (Karn)(HC) CIT v. Sun Engineering Works (P) Ltd. (1992) 107 CTR  209(SC) (1992)   4 SCC 363, distinguished. (AY. 1999-2000,  2000-01)