INDIAN EXPRESS PROPERTY LTD, MUMBAI V. DCIT 3(2), MUMBAI

ITA 2690/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78756 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 01-05-2014
• Assessment Year: 1997-1998
• Appeal Filed On: 07-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PITAMBER DAS
• Assessee Lawyers: V MOHAN
• Keywords: Business expenditure; Principle of natural justice; Non passing of speaking order; Commercial expediency
• Section: 43B; 37(1)

Judgement Text

1 , INCOME TAX APPELLATE TRIBUNAL MUMBAI - I BENCH MUMBAI , / ! ! ! ! , BEFORE S/SH.VIJAYPAL RAO,JUDICIAL MEM BER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 2690/M/2011, ' ' ' ' # # # # / ASSESSMENT YEAR 1997-98 INDIAN EXPRESS PROPERTY LTD. EXPRESS TOWERS, NARIMAN POINT, MUMBAI- 400021 VS. DCIT 3(2) 6 TH FLOOR, AAYAKAR, MUMBAI. PAN: AAACI2838R ( $% / APPELLANT) ( &'$% / RESPONDENT) /. ITA NO. 2692/M/2011, ' ' ' ' # # # # / ASSESSMENT YEAR 2001-02 INDIAN EXPRESS PROPERTY LTD. EXPRESS TOWERS, NARIMAN POINT, MUMBAI- 400021 VS. DCIT 3(2) 6 TH FLOOR, AAYAKAR, MUMBAI. PAN: AAACI2838R ( $% / APPELLANT) ( &'$% / RESPONDENT) $% ( / APPELLANT BY : SHRI V.MO HAN &'$% ) ( / RESPONDENT BY : SHRI PITAMBER DAS ' ' ' ' ) )) ) *+ *+ *+ *+ / DATE OF HEARING : 01-05-2014 ,-# ) *+ / DATE OF PRONOUNCEMENT : 01- 05- 2014 ' ' ' ' , 1961 ) )) ) 254 )1( *.* *.* *.* *.* / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,A.M: CHALLENGING THE ORDER DATED10.01.2011OF THE CIT(A)- 7,MUMBAI,ASSESSEE-COMPANY HAS FILED APPEALS FOR THE ABOVE REFERRED TWO ASSESSMENT YEARS (AY.S)RAISING IDENTICAL GROUNDS OF APPEAL. GROUNDS OF APPEAL FOR THE YEAR 1997-98 READ AS UNDE R: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST OF RS. 9,23,148/-. 2.APPELLANT CRAVES LEAVE TO AMEND OR ALTER THE EXIS TING GROUND OR ADD FURTHER GROUND AT THE TIME OF HEARING. 2 FOLLOWING ARE THE GROUNDS FOR THE AY.2001-02: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST OF RS. 1,59,99,452/-. 2. APPELLANT CRAVES LEAVE TO AMEND OR ALTER THE EXI STING GROUND OR ADD FURTHER GROUND AT THE TIME OF HEARING. ITA/2960/M/2011-AY.1997-98:BRIEF FACTS AND HISTORY: 2. EFFECTIVE GROUND OF APPEAL PERTAINS TO DISALLOWANCE OF INTEREST EXPENDITURE OF RS.9,23,148/-. ASSESSEE-COMPANY,HAD FILED ITS RETURN OF INCOME DEC LARING NET LOSS OF RS.30,05,061/-.ASSESSING OFFICER(AO)FINALISED THE ASSESSMENT ORDER U/S.143(3 ) OF THE ACT,ON 15.03.2000.DURING THE ASSESSMENT PROCEEDINGS,AO FOUND THAT THE ASSESSEE H AD CLAIMED DEDUCTION UNDER THE HEADS INTEREST EXPENDITURE AND DISCOUNTING CHARGES.IT WAS ARGUED BEFORE HIM THAT RENT RECEIVABLE FROM THE SUB TENANTS WAS DISCOUNTED UPFRONT BY THE PAYME NT OF THE DISCOUNTING CHARGES AND ADVANCING INTEREST-FREE LOAN TO THE HOLDING COMPANY I.E. INDI AN EXPRESS NEWSPAPERS LTD.(IENL).HE DISALLO- WED THE DISCOUNTING CHARGES ON THE BASIS THAT INTER EST BEARING FUNDS WERE UTILISED FOR THE PURPOSE OF ADVANCING INTEREST-FREELOANS WHICH WERE TOTALLY UNCONNECTED WITH ASSESSEES BUSINESS,THAT EXPENDITURE WAS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS,THAT SAME WAS NOT ALLOWABLE EITHER UNDER SECTION 37(1) OR UND ER SECTION 36(1 )(III) OF THE ACT.AGAINST THE ORDER OF THE AO,ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEAL AUTHORITY (FAA).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER,HE DISMISSED THE APPEAL FILED BY THE ASSESSEE THEREAFTER THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE TRIBUNAL AND VIDE ITS ORDER DATED 17.08.2004(ITA/4484/M/01)IT RESTORED THE MATTER TO THE FILE OF THE FAA.IN HIS ORDER DATED 30.08. 2005,HE WORKED OUT THE NEXUS BETWEEN INTEREST AND N ON INTEREST BEARING FUNDS AVAILABLE WITH THE 3 ASSESSEE THAT WERE USED FOR ADVANCING INTEREST-FREE LOANS TO IENL.HE HELD THAT AN AMOUNT OF RS. 10,71,038 WAS ALLOWABLE AS DEDUCTION WHILE RS.9,23, 143/- WAS REQUIRED TO BE DISALLOWED. CROSS- APPEALS WERE FILED BY THE ASSESSEE AND THE AO AGAIN ST THE ORDER OF THE TRIBUNAL.IN THE CONSOLIDATED ORDER DATED 22.09.2208(ITA NO.6444/M/0 5,ITA/6734/M/05-AY. AND ITA/6735/M/ 05-AY. 2001 -02)TRIBUNAL HELD AS UNDER: 9. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE RECORD OF THE CASE.IN OUR OPINIONS THE FACTS HAVE TO BE REEXAMINED IN THE LIGHT OF THE DECISION OF TH E HONBLE SUPREME COURT IN THE CASE OF S.A. BUILDERS(SUPRA) WHEREIN IT HAS BEEN HELD AS UNDER: IN ORDER TO DECIDE WHETHER INTEREST ON FUNDS BORRO WED BY THE ASSESSEE TO GIVE AN INTEREST FREE LOAN TO A SISTER CONCERN, SHOULD BE ALLOWED AS A DE DUCTION U/S. 36(1)(VII)OF THE I. T. ACT,1961, ONE HAS TO ENQUIRE WHETHER THE LOAN WAS GIVEN BY THE AS SESSEE AS A MEASURE OF COMMERCIAL EXPEDIENCY.THE EXPRESSION COMMERCIAL EXPEDIENCY I S ONE OF WIDE IMPORTANCE AND INCLUDES SUCH EXPENDITURE AS A PRUDENT BUSINESSMAN IT INCURS FOR THE PURPOSE OF BUSINESS.THE EXPENDITURE MAY NOT HAVE BEEN INCURRED UNDER ANY LEGAL OBLIGATI ON, BUT YET IT IS ALLOWABLE AS BUSINESS EXPENDITURE IF IT WAS INCURRED ON GROUNDS OF COMMER CIAL EXPEDIENCY, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF S.A. BUILDERS (SUPRA),WE RESTORE THE ISSUE TO THE FILE OF THE ASS ESSING OFFICER FOR BOTH THE ASSESSMENT YEARS UNDER APPEAL WITH THE FOLLOWING DIRECTIONS: 1) TO EXAMINE THE FACTS IN THE LIGHT OF DECISION IN THE CASE OF S.A. BUILDERS (CITED SUPRA). WHILE SO EXAMINING, HE WILL ALSO EXAMINE, A S RIGHTLY SUBMITTED BY LEARNED DR., THE UTILIZATION OF FUNDS BY BORROWER A LSO IN ORDER TO REACH CORRECT CONCLUSION. 2) IF THERE IS MIXED UP FUNDS THEN THE DISALLOWANCE BE MADE PROPORTIONATELY IN THE RATIO OF INTEREST BEARING TO NON INTEREST BEARING F UNDS. THUS,THE MATTER STOOD RESTORED TO THE FILE OF THE A O FOR FRAMING THE ASSESSMENT ORDER ON THE BASIS 4 OF THE DIRECTIONS GIVEN IN THIS BEHALF BY THE ITAT. IN THE PROCEEDINGS BEFORE THE AO ASSESSEE MADE DETAILED SUBMISSIONS.AFTER PERUSING THE SAME,T HE AO HELD THAT INTEREST FREE LOANS WERE ADVANCED TO IENB WERE NOT IN THE AMBIT OF COMMERCI AL EXPEDIENCY,THAT THE LEASE AGREEMENT ENTERED BY THE ASSESSEE COMPANY WITH IENB WAS A BUS INESS AGREEMENT ,THAT ALL THE COMMITMENTS AS PER THE LEASE AGREEMENT WERE FULFILLED BY THE AS SESSEE-COMPANY AND AFTER HAVING DONE SO IT WENT ON REDUCING THE INTEREST BURDEN OF IENB, THAT INTEREST AMOUNT PAID OVER AND ABOVE THE LEASE AGREEMENT WAS NOT ALLOWABLE,THAT THE ENTIRE MONEY B ORROWED FROM HDFC WAS DIRECTLY PROVIDED TO IENB BY HDFC,THAT AS PER THE LOAN AGREEMENT IENB WAS THE BORROWER AND THE ASSESSEE WAS THE CONFIRMING PARTY,THAT THE AMOUNT WAS NOT ADVANC ED BY THE ASSESSEE COMPANY FROM ITS OWN FUND,THAT ISSUE OF NON INTEREST BEARING FUND AND IN TEREST BEARING FIND HAD NO RELEVANCE TO DECIDE THE TAX LIABILITY OF THE ASSESSEE. 2.1.O RDER OF THE AO WAS CHALLENGED BEFORE THE FAA.DECIDI NG THE APPEAL AGAINST THE ASSESSEE,HE HELD THAT AO HAD CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND HAD ALSO EXAMINED THE APPLICABILITY OF THE DECISION OF THE HONBLE APEX C OURT.HE AGREED WITH THE CONCLUSION WITH THE OBSERVATION AND CONCLUSION MADE BY THE AO,THAT THE AO HAD GIVEN EFFECT TO THE ORDER OF THE ITAT PROPERLY. 2.2. BEFORE US,AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT HOLDING COMPANY WAS FACING FINANCIAL HARDSHIP,THAT LOANS WERE ADVANCED TO HOLD ING COMPANY,THAT THERE WAS COMMERCIAL EXPEDIENCY IN THE TRANSACTION ENTERED IN TO BY THE HOLDING COMPANY AND THE ASSESSEE,THAT AO/FAA NOT LOOKED INTO THE COMMERCIAL EXPEDIENCY ASPECT,TH AT ISSUE OF UTILISATION OF MIXED FUNDS IN THE RATIO OF INTEREST BEARING TO NON-INTEREST BEARING F UND WAS NOT CONSIDERED BY BOTH THE AUTHORITIES, THAT ASSESSEE HAD 76.03 % NON-INTEREST BEARING FUND S WITH IT DURING THE YEAR UNDER APPEAL, THAT INTEREST BEARING FUNDS FROM THE HDFC WERE DIVERTED TO THE HOLDING COMPANY.HE REFERRED TO PAGE 5 NO.5 AND 15 OF THE PAPER BOOK.DEPARTMENTAL REPRESEN TATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT ASSESSEE HAD ACQUIRED CERTAIN FLOORS ON LEASE IN EX PRESS TOWERS BELONGING TO IENL AND GAVE THEM ON SUB-LEASE TO VARIOUS TENANTS,THAT IN THE CO MPUTATION OF INCOME IT DISALLOWED AN AMOUNT OF RS.48,77,641/-BEING INTEREST ON THE AMOUNT BORRO WED FROM HDFC UNDER SECTION 43B OF THE ACT,THAT THE BALANCE INTEREST OF RS.1,28,465 AND RE NT DISCOUNTING CHARGES OF RS.19,94,186/- WAS CLAIMED AS DEDUCTION.FAA IN HIS ORDER DATED 30.08.2 005 HAD WORKED OUT THE NEXUS BETWEEN INTEREST BEARING AND NON- INTEREST BEARING FUNDS AV AILABLE WITH THE ASSESSEE THAT WERE ADVANCED TO IENL AND HAD HELD THAT CERTAIN PORTION OF THE INTER EST EXPENDITURE WAS ALLOWABLE.WE FURTHER FIND THAT ITAT IN ITS ORDER (SUPRA) HAD SPECIFICALLY DIR ECTED THE AO TO LOOK IN TO THE ISSUE OF UTILISATION OF FUNDS AND TO CONSIDER THE COMMERCIAL EXPEDIENCY ANGLE BEFORE REACHING AT FINAL CONCLUSION.AO WAS SPECIFICALLY DIRECTED TO MAKE DIS ALLOWANCE PROPORTIONATELY IN RATIO OF INTEREST BEARING TO NON-INTEREST BEARING FUNDS, IF ASSESSEE HAD MIXED FUNDS.WE FIND THAT WHILE PASSING THE ORDER GIVING EFFECT TO THE ORDER OF THE ITAT,AO HAS OBSERVED THAT ISSUE OF DISALLOWANCE TO BE MADE PROPORTIONATELY HAD NO RELEVANCE WITH REGARD T O COMMERCIAL EXPEDIENCY.WE ALSO FIND THAT THE AO HAD NOT DELIBERATED UPON THE FINANCIAL HARDS HIP OF THE HOLDING COMPANY AND RELEVANT MATERIAL.IN THE APPEAL FILED BY THE ASSESSEE,BEFORE THE FAA,IT WAS SPECIFICALLY MENTIONED THAT AO HAD NOT ADHERED TO DIRECTIONS OF THE TRIBIUNAL,THAT DISALLOWANCE OUT OF INTEREST PAYMENT AND DISCOUNTING CHARGES WAS NOT WARRANTED. DECIDING THE APPEAL AGAINST THE ASSESSEE, FAA HAD HELD THAT HE AGREED WITH THE OBSERVATIONS AND CONCLUSION S MADE BY THE AO IN THE ASSESSMENT ORDER. WE FIND THAT HE HAS NOT GIVEN ANY FINDING ON COMMER CIAL EXPEDIENCY AS WELL AS ISSUE OF INTEREST BEARING/NON-INTEREST BEARING FUNDS.WHIN SPECIFIC GR OUNDS AGAINST THE ORDER OF THE AO WERE TAKEN BEFORE HIM, IT WAS THE DUTY OF THE FAA TO PASS A SP EAKING ORDER. 6 2.3.A. IT IS SAID REASON IS THE SOUL OF LAW AND WHEN REASO N OF ANY PARTICULAR LAW CEASES,SO DOES THE LAW. IN STATE OF WEST BENGAL V. ATUL KRISHNA SHAW,A IR 1990 SC 2205,THE APEX COURT HAS HELD THAT THAT GIVING OF REASONS IS AN ESSENTIAL ELEMENT OF ADMINISTRATION OF JUSTICE.A RIGHT TO REASON IS, THEREFORE, CONSIDERED AN INDISPENSABLE PART OF SOUN D SYSTEM OF JUDICIAL REVIEW.THE PRINCIPLES OF NATURAL JUSTICE HAS TWIN INGREDIENTS ;FIRSTLY, THE PERSON WHO IS LIKELY TO BE ADVERSELY AFFECTED BY THE ACTION OF THE AUTHORITIES CAN BE GIVEN NOTICE T O SHOW CAUSE THEREOF AND GRANTED AN OPPORTUNITY OF HEARING AND,SECONDLY, THE ORDERS SO PASSED BY TH E AUTHORITIES SHOULD GIVE REASON FOR ARRIVING AT ANY CONCLUSION SHOWING PROPER APPLICATION OF MIND.V IOLATION OF EITHER OF THEM COULD, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE,VITIATE T HE ORDER ITSELF.IN THE MATTER OF GEC ALSTHOM INDIA LTD.HONBLE MADRAS HIGH COURT (361ITR304)HAS SUMMARISED THE PRINCIPLES OF RECORDING OF REASONS AS UNDER: (A) IN INDIA THE JUDICIAL TREND HAS ALWAYS BEEN TO RECORD REASONS, EVEN IN ADMINISTRATIVE DECISIONS, IF SUCH DECISIONS AFFECT ANYONE PRE-JUDICIALLY. (B)A QUASI-JUDICIAL AUTHORITY MUST RECORD REASONS I N SUPPORT OF ITS CONCLUSIONS. (C)INSISTENCE ON RECORDING OF REASONS IS MEANT TO S ERVE THE WIDER PRINCIPLE OF JUSTICE THAT JUSTICE MUST NOT ONLY BE DONE IT MUST ALSO APPEAR TO BE DON E AS WELL. (D)RECORDING OF REASONS ALSO OPERATES AS A VALID RE STRAINT ON ANY POSSIBLE ARBITRARY EXERCISE OF JUDICIAL AND QUASI-JUDICIAL OR EVEN ADMINISTRATIVE POWER. (E)REASONS REASSURE THAT DISCRETION HAS BEEN EXERCI SED BY THE DECISION-MAKER ON RELEVANT GROUNDS AND BY DISREGARDING EXTRANEOUS CONSIDERATIONS. (F)REASONS HAVE VIRTUALLY BECOME AS INDISPENSABLE A COMPONENT OF A DECISION-MAKING PROCESS AS OBSERVING PRINCIPLES OF NATURAL JUSTICE BY JUDICIAL , QUASI-JUDICIAL AND EVEN BY ADMINISTRATIVE BODIES. 7 (G)REASONS FACILITATE THE PROCESS OF JUDICIAL REVIE W BY SUPERIOR COURTS. (H)THE ONGOING JUDICIAL TREND IN ALL COUNTRIES COMM ITTED TO RULE OF LAW AND CONSTITUTIONAL GOVERNANCE IS IN FAVOUR OF REASONED DECISIONS BASED ON RELEVANT FACTS. THIS IS VIRTUALLY THE LIFEBLOOD OF JUDICIAL DECISION-MAKING JUSTIFYING TH E PRINCIPLE THAT REASON IS THE SOUL OF JUSTICE. (I)JUDICIAL OR EVEN QUASI-JUDICIAL OPINIONS THESE D AYS CAN BE AS DIFFERENT AS THE JUDGES AND AUTHORI -TIES WHO DELIVER THEM. ALL THESE DECISIONS SERVE O NE COMMON PURPOSE WHICH IS TO DEMONSTRATE BY REASON THAT THE RELEVANT FACTORS HAVE BEEN OBJEC TIVELY CONSIDERED. THIS IS IMPORTANT FOR SUSTAINING THE LITIGANTS' FAITH IN THE JUSTICE DELI VERY SYSTEM. (J)INSISTENCE ON REASON IS A REQUIREMENT FOR BOTH J UDICIAL ACCOUNT-ABILITY AND TRANSPARENCY. (K)IF A JUDGE OR A QUASI-JUDICIAL AUTHORITY IS NOT CANDID ENOUGH ABOUT HIS/HER DECISION-MAKING PROCESS THEN IT IS IMPOSSIBLE TO KNOW WHETHER THE P ERSON DECIDING IS FAITHFUL TO THE DOCTRINE OF PRECEDENT OR TO PRINCIPLES OF INCREMENTALISM. (L)REASONS IN SUPPORT OF DECISIONS MUST BE COGENT, CLEAR AND SUCCINCT.A PRETENCE OF REASONS OR 'RUBBER-STAMP REASONS' IS NOT TO BE EQUATED WITH A VALID DECISION-MAKING PROCESS. (M)IT CANNOT BE DOUBTED THAT TRANSPARENCY IS THE SI NE QUA NON OF RESTRAINT ON ABUSE OF JUDICIAL POWERS.TRANSPARENCY IN DECISION-MAKING NOT ONLY MAK ES THE JUDGES AND DECISION-MAKERS LESS PRONE TO ERRORS BUT ALSO MAKES THEM SUBJECT TO BROA DER SCRUTINY (N)SINCE THE REQUIREMENT TO RECORD REASONS EMANATES FROM THE BROAD DOCTRINE OF FAIRNESS IN DECISION-MAKING, THE SAID REQUIREMENT IS NOW VIRTUA LLY A COMPONENT OF HUMAN RIGHTS. (O)IN ALL COMMON LAW JURISDICTIONS JUDGMENTS PLAY A VITAL ROLE IN SETTING UP PRECEDENTS FOR THE FUTURE.THEREFORE, FOR DEVELOPMENT OF LAW, REQUIREME NT OF GIVING REASONS FOR THE DECISION IS OF THE ESSENCE AND IS VIRTUALLY A PART OF 'DUE PROCESS'. IN VIEW OF THE ABOVE DISCUSSION WE ARE OF THE OPINI ON THAT AN ORDER WITHOUT REASONS IS AS GOOD AS 8 NO ORDER.ORDER OF THE FAA,CHALLENGED BEFORE US,IS A N ORDER THAT FALLS IN THE CATEGORY OF NON SPEAKING ORDER I.E.THE ORDER NOT MENTIONING THE REA SONS FOR ARRIVING AT A CONCLUSION.BY ENDORSING THE VIEW OF THE AO;THAT THE ISSUE OF NON INTEREST B EARING FUND AND INTEREST BEARING FIND HAD NO RELEVANCE TO DECIDE THE TAX LIABILITY OF THE ASSESS EE;FAA HAS PROVED THAT HIS ORDER CONTAINS RUBBER STAMP REASON.TRIBUNAL HAD SPECIFICALLY GIVEN DIRECTIONS IN THIS REGARD AND IT WAS THE THIRD TIME THE SAME ISSUE WAS BEFORE HIM.IT WAS EXPECTED THAT HE WOULD TAKE NOTICE OF THE PERCENTAGE OF AVAILABILITY OF FUNDS AND DECIDE THE ISSUE.BUT,H E SIMPLY ENDORSED THE ORDER OF THE AO,WHO ACCORDING TO US HAS FAILED TO UNDERSTAND THE DIRECT IONS OF THE TRIBUNAL IN PROPER PROSPECTIVE. AS THE ORDER OF THE FAA DOES NOT REVEAL THE REASONS FOR UPHOLDING THE ORDER OF THE AO, THEREFORE, IN THE INTEREST OF JUSTICE,WE ARE SENDING BACK THE MATTER TO THE FILE OF THE FAA FOR FRESH ADJUDICATION, HE IS DIRECTED TO PASS SPEAKING AND R EASONED ORDER, FOLLOWING THE DIRECTION OF THE ITAT AND DECIDE THE ISSUE AFRESH. HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. EFFECTIVE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. ITA/2062/M/2011-AY.2001-02: 3. DURING THE AY.UNDER CONSIDERATION ALSO ASSESSEE HA D GIVEN CERTAIN PROPERTIES ON SUB-LEASE TO TENANTS THAT WERE TAKEN ON LEASE FROM IENL.RETURN O F INCOME WAS FILED DECLARING LOSS OF RS.1.88 CRORES INCLUDING INTEREST PAYMENT,TO HDFC,AMOUNTING TO RS.1.59 CRORES.AO DISALLOWED THE CLAIM OF INTEREST MADE BY THE ASSESSEE,HOLDING THA T INTEREST BEARING FUNDS WERE UTILISED FOR THE PURPOSE OF ADVANCING INTEREST FREE LOANS.REST OF TH E FACTS ARE IDENTICAL TO THE FACTS FOR THE AY.1997-98 MENTIONED IN EARLIER PART OF OUR ORDER. FAA VIDE HIS ORDER DATED 10.01.2011,HELD THAT FOLLO WING THE ORDER FOR THE AY.1997-98 HE WAS DISMISSING THE APPEAL FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION ALSO. 9 FOLLOWING OUR ORDER FOR THE AY.1997-98,WE ARE RESTO RING THE MATTER TO THE FILE OF THE FAA FOR FRESH ADJUDICATION.APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART. AS A RESULT,APPEALS FILED BY THE ASSESSEE FOR BOTH THE AYS. STAND PARTLY ALLOWED. 0*1 0*1 0*1 0*1 '2* '2* '2* '2* 3 3 3 3 4 4 4 4 ) )) ) . . . . -'5 ' #6 ) -'5 ' #6 ) -'5 ' #6 ) -'5 ' #6 ) 7 7 7 7 / 8 / 8 / 8 / 8 9* 9* 9* 9* ) )) ) * * * * :; :;:; :; . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST, MAY,2014. / ) ,-# 7 <' 1 , 2014 - ) . > SD/- SD/- ( / VIJAY PAL RAO ) ( ! / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, <' /DATE: .01 . 05.2014 SK / / / / ) )) ) &* &* &* &* @ #* @ #* @ #* @ #* / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT (A) / A B , 4. THE CONCERNED CIT / A B 5. DR I BENCH, ITAT, MUMBAI / C. &*' , . . . 6. GUARD FILE/ . 0 '* '* '* '* &* &*&* &* //TRUE COPY// /' / BY ORDER, D / : DY./ASST. REGISTRAR , /ITAT, MUMBAI