Majestic Hotels Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 6260/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97737 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 04-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: RAJEEV MANGO
• Keywords: Question of law; Commercial expediency; Revenue expenditure
• Section: 37

Judgement Text

PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SH. C.M.GARG, JM AND SH. PRA SHANT MAHARISHI, AM ITA NO. 1689/DEL/2013 A Y: 2008-09 DCIT CIRCLE 6 (1), NEW DELHI VS MAJESTIC HOTELS LTD., G-82, LAJPAT NAGAR-II NEW DELHI PAN NO. AAACM9066F ITA NO. 6260/DEL/2013 A.Y. 2010-11 MAJESTIC HOTELS LTD., G-82, LAJPAT NAGAR-II NEW DELHI VS ADDL. CIT RANGE-6 NEW DELHI PAN : AAACM9066F ASSESSEE BY: RAJEEV MANGO, C.A. REVENUE BY: SH. P. DAM KANUNJNA, SR. DR DATE OF HEARING : 04.11.2015 DATE OF PRONOUNCEME NT : 06 .11.2015 ORDER PER PRASHANT MAHARISHI, AM: 01. THESE ARE THE TWO APPEALS RELATING TO THE ASSESSEE FOR ASSESSMENT YEAR 2008-09 WHERE REVENUE IS IN APPEAL BEFORE US AND IN AY 2010-11 WH ERE THE ASESSEE IS IN APPEAL BEFORE US. THEREFORE FOR THE SAKE OF CONVENIENCE BOTH THES E APPEALS ARE DISPOSED OFF BY THE COMMON ORDER. 02. IN 2008-09 FOLLOWING GROUNDS OF APPEAL ARE TAKEN BY REVENUE :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE OF INTEREST EXPENSES AMOU NTING TO RS. 24,05,333/- BY HOLDING THAT THE ASSESSEE WAS HAVING ADEQUATE INTER EST FREE FUNDS AT ITS DISPOSAL WITHOUT CONSIDERING THE FACT THAT HAD INTE REST FREE FUNDS WOULD BEEN ITA NO. 1689/DEL/2013, ITA NO. 6260/DEL/2013 MAJESTIC HOTELS LTD. 2 AVAILABLE WITH THE ASSESSEE THEN THE ASSESSEE WOULD NOT APPLIED FOR DEBT RESTRICTING WITH THE FINANCIAL INSTITUTIONS ? 2. WHETHER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) ERRED IN DELETING THE DISALLOWANCE OF INTEREST EXPENSES AMOUNTING TO RS. 24,05,333/- BY RELYING UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN BHARTI TELEVENTURES 331 ITR 502 EVEN THE ASSESSEE F AILED TO PROVE ITS COMMERCIAL EXPENDIENCY AND CIT (A) ALSO HELD THAT T HERE WAS NO COMMERCIAL EXPEDIENCY ? 3. WHETHER THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE DECISION IN TH E CASE OF CIT VS. ABHISHEK INDUSTRIES LTD. 286 ITR 1 IN WHICH THE HONBLE PUNJ AB AND HARYANA HIGH COURT HAS HELD THAT THE ONUS OF ESTABLISHING THE NE XUS BETWEEN THE INTEREST FREE FUNDS AND ADVANCES IS ON THE ASSESSEE AND RECEIPTS FROM ALL SOURCES GO IN COMMON KITTY ? 03. ALL THE THREE GROUNDS OF APPEAL ARE AGAINST THE D ELETION OF INTEREST DISALLOWANCE AMOUNTING TO RS. 24,05,333/- BY CIT (A) HOLDING THA T ASSESSEE WAS HAVING ADEQUATE INTEREST FREE FUNDS AT ITS DISPOSAL WITHOU T CONSIDERING THE FACT THAT THE INTEREST FREE FUNDS WOULD BE AVAILABLE WITH THE ASS ESSEE THEN ASSESSEE WOULD NOT HAVE APPLIED FOR DEBT RESTRUCTURING WITH THE FINANC IAL INSTITUTIONS AND ASSESSEE HAS FAILED TO PROVE COMMERCIAL EXPEDIENCY. FURTHER CIT (A) DID NOT CONSIDER THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT I N THE CIT VS. ABHISHEK INDUSTRIES LTD. WHERE THE ONUS OF ESTABLISHING NEXU S BETWEEN THE INTEREST FREE FUNDS AND ADVANCES IS ON THE ASSESSEE. 04. BEFORE US LD. DR SUBMITTED THAT ASSESSING OFFICER H AS GIVEN DETAILED REASON AT PARA NO. 3 OF THE ASSESSMENT ORDER HOLDING THAT ASSESSEE WAS HAVING HUGE FINANCIAL INTEREST BURDEN THEREFORE IT WOULD BE NOT PROVEN FO R A BUSINESSMAN TO DIVERT THE FUNDS FOR NON-INTEREST BEARING ADVANCES. THEREFORE HE DISALLOWED INTEREST OF RS. 29,26,116/-. HE FURTHER SUBMITTED THAT CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 5,20,783/- ONLY AND DELETING TH E DISALLOWANCE OF RS. 24,05,333/-. HE FURTHER SUBMITTED THAT THE AMOUNT OF ADVANCES GIVEN TO NETCRADEL INDIA PVT. LTD. AND SAFFRON RANGE IT SOLUTION PVT. LTD. WERE FOR NON-BUSINESS PURPOSES AND THEREFORE INTEREST @ 12.5% COMPUTED ON THIS ADVANCES SHOULD BE DISALLOWANCE. ITA NO. 1689/DEL/2013, ITA NO. 6260/DEL/2013 MAJESTIC HOTELS LTD. 3 05. LD. AR BEFORE US SUBMITTED THAT CIT(A) HAS RIGHTLY DELETED IN THE INTEREST DISALLOWANCES FOR THE FOLLOWING REASONS : A) THE ADVANCES THE AMOUNT OUTSTANDING WITH RESPECT TO NETCRADEL INDIA PVT. LTD. IS FOR THE PURPOSE OF THE BUSINESS AND THEREFO RE NO INTEREST DISALLOWANCE CAN BE IMPUTED FOR THE SAME. B) REGARDING THE ADVANCE TO SAFFRON RANGE IT SOLUTION PVT. LTD. NO ADVANCES AUTHORITIES ARE NOT GIVEN DURING THE YEAR. C) ASSESSEE HAS 52.64 CRORES OF INTEREST FREE FUNDS AV AILABLE WITH THE ASSESSEE D) THE PURPOSE OF THE BORROWER ON WHICH IS INTEREST OF PAY IS FOR THE CONSTRUCTION OF HOTEL AND THEREFORE FULL INTEREST I S ALLOWABLE. 06. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS , THE FACTS EMERGING ARE THAT THE ASSESSEE COMPANY IS RUNNING START CATEGORY HOTEL SI NCE JANUARY, 2000. DURING ASSESSMENT, AO NOTICED THAT ASSESSEE HAS OUTSTANDI NG LOANS AND ADVANCES TO TWO PARTIES NETCRADEL INDIA PVT. LTD. OF RS. 1,33,11,56 4/- AND SAFFRON RANGE IT SOLUTION PVT. LTD. RS. 75,17,061/- AS AT 31.03.2008 . AS NO INTEREST HAS BEEN CHARGED ON THESE TWO ADVANCES WHERE ASSESSEE IS PAYING INT EREST OF RS. 3,03,56,328/-, AO WAS OF THE VIEW THAT INTEREST BEARING FUNDS HAVE B EEN GIVEN TO ABOVE THESE TWO PARTIES WITHOUT CHARGING INTEREST. THEREFORE AO DIS ALLOWED INTEREST @ 12.5% OF RS. 29,26,116/- . ASSESSEE CARRIED MATTER BEFORE THE CI T(A) WHO IN TURN RESTRICTED THE DISALLOWANCE TO RS. 5,20,783/- AND DELETED DISALLOW ANCE OF RS. 24,05,333/-. THEREFORE REVENUE IS BEFORE US IN THIS APPEAL. THE ASSESSEE IS HAVING A SHARE CAPITAL OF RS. 35 CRORES AS ITS OWN FUND AS AT 31.03.2008. AGAINST WHICH THE ADVANCES GIVEN TO THIS TWO PARTIES ARE OF RS. 2,08,28,625/- . THEREFORE ITS APPARENT THAT ASSESSEE HAS MORE INTEREST FREE FUNDS AVAILABLE WIT H IT THEN AMOUNT GIVEN TO THESE PARTIES FREE OF INTEREST. ON READING OF THE ASSESSM ENT ORDER IT IS ESTABLISHED THAT AO HAS NOT FOUND ANY NEXUS OF THE INTEREST BEARING FUN DS DIVERTED TO NON-INTEREST BEARING ADVANCES. WHEN THE MATTER WAS BEFORE CIT(A) , CIT(A) HAS EXAMINED THE ISSUE ON EACH TRANSACTION WISE AND FOUND THAT AMOUN T OF INTEREST OF RS. 5,20,783/- OUT OF TOTAL INTEREST EXPENDITURE OF RS. 2,92,611 I S NOT FOR THE PURPOSE OF THE BUSINESS. THIS DISALLOWANCE CONFIRMED BY THE CIT IS BASED ON ASSESSEE CONCEDING ITA NO. 1689/DEL/2013, ITA NO. 6260/DEL/2013 MAJESTIC HOTELS LTD. 4 THAT AMOUNT OF LOAN OF RS. 10 LAKHS ON 07.03.2008 A ND RS. 6 LAKHS ON 31.03.2008 GIVEN TO M/S NETCRADEL INDIA PVT. LTD. IS OUT OF BO RROWED FUNDS TAKEN FROM HSBC AND IDBI. SIMILARLY AN INTEREST AMOUNT OF RS. 1,56, 916 PERTAINING TO SAFFRON IT SOLUTIONS PRIVATE LIMITED AS THERE WAS A NEXUS OF T HE FUND AS LOAN FROM HSBC. FOR THE BALANCE AMOUNT CIT (A) HAS DELETED DISALL OWANCE HOLDING THAT AMOUNT OF ADVANCES GIVEN TO NIPL WAS GIVING ONLINE SUPPORT TO THE ASSESSEE COMPANY AND TO KEEP THAT COMPANY IN COMFORTABLE FUND FLOW ASSESSEE HAS GIVEN THE ADVANCES SINCE LONG TO ENSURE CONTINUOUS SUPPLY OF SERVICES. THERE FORE THE ADVANCES MADE BY THE ASSESSEE ARE FOR THE PURPOSES OF THE BUSINESS AND T HERE EXIST BUSINESS EXIGENCY IN PROVIDING LOAN TO THIS PARTY. REVENUES RELIANCE ON THE DECISION OF HONOURABLE PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT V ABHI SHEK INDUSTRIES LIMITED 286 ITR 1 IS MISPLACED. CIT V. ABHISHEK INDUSTRIES LTD . [2006] 286 ITR 1/ 156 TAXMAN 257 (PUNJ. & HAR.) [PARA 2] IMPLIEDLY OVERRU LED BY THE DECISION OF HONOURABLE SUPREME COURT IN CASE OF CIT V MUNJAL SA LES CORPORATIONS 298 ITR 298. FURTHER HONOURABLE DELHI HIGH COURT IN CIT V T IN BOX CO IN 260 ITR 637 HAS HELD THAT 9. WHILE NOTICING THAT THE DEPARTMENT HAD NOT BEEN AB LE TO CONTROVERT OR DISPROVE THE FACTS THAT THE ASSESSEE HAD SUBSTANTIAL CAPITAL AND INTEREST-F REE FUNDS AVAILABLE WITH IT, NOT ONLY IN THE PRECEDING YEARS BUT ALSO IN THE YEARS UNDER CONSIDE RATION, WHICH FAR EXCEEDED THE INTEREST-FREE ADVANCES TO THE SISTER CONCERN, THE TRIBUNAL FINALL Y CONCLUDED AS UNDER : 'WE ARE IN AGREEMENT WITH THE SUBMISSIONS MADE BY L EARNED COUNSEL FOR THE APPELLANT BECAUSE THE FACTUAL POSITION AS SUBMITTED BEFORE US BY LEAR NED COUNSEL FOR THE APPELLANT HAS NOT BEEN CONTROVERTED BY THE LEARNED DEPARTMENTAL REPRESENTA TIVE. THE ADMITTED FACTS ARE THAT THE APPELLANT-FIRM HAS BEEN ENJOYING OVERDRAFT FACILITI ES FROM THE STATE BANK OF INDIA, CHANDNI CHOWK, DELHI, SINCE LONG TIME PAST AGAINST THE HYPO THECATION OF GOODS, ETC., AND PLEDGE OF LAND, BUILDING, PLANT AND MACHINERY AND THE INTEREST PAID ON SUCH OVERDRAFT ACCOUNT HAS BEEN ALLOWED BY THE REVENUE YEAR AFTER YEAR. EVEN IN THE ASSESSM ENT YEAR 1982-83, NO SUCH DISALLOWANCE HAD BEEN MADE WHEN ADMITTEDLY SUBSTANTIAL INTEREST- FREE FUNDS HAD BEEN ADVANCED TO THE SISTER CONCERN. THE APPELLANT HAS NOT PAID ANY INTEREST TO ANY OTHER PARTY EITHER IN THE PAST OR DURING THE YEAR UNDER APPEAL. FURTHER IN THE YEARS UNDER APPEA L, EITHER THE FRESH ADVANCES TO PNSMPL HAVE BEEN QUITE INSIGNIFICANT OR THERE HAVE BEEN AB SOLUTELY NO FRESH ADVANCES MADE BY THE APPELLANT, RATHER DURING THE ASSESSMENT YEARS 1990- 91 TO 1992-93 THE APPELLANT HAD RECEIVED BACK FROM THE SISTER CONCERN MORE THAN RS. 10 LAKHS . THE CAPITAL OF THE FIRM AND INTEREST-FREE UNSECURED LOANS WITH THE APPELLANT FOR EXCEED THE A MOUNTS ADVANCED TO THE SISTER CONCERN IN ALL THE YEARS UNDER APPEAL A FACT NEITHER CONTROVERTED NOR DISPROVED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO.' [EMPHASIS SUPPLIED] 10. ADDITIONALLY, THE TRIBUNAL HAS ALSO NOTED THAT THE DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY SPECIFIC INTEREST BEARING BORROWED FU NDS, WHICH HAD BEEN DIVERTED BY THE ASSESSEE TO ITS SISTER CONCERN. 11. THE AFORENOTED FINDINGS OF THE TRIBUNAL BEING BASE D ON THE RELEVANT EVIDENCE ON RECORD, NO QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTION O F LAW, ARISES FROM THE ORDERS OF THE TRIBUNAL. IT ITA NO. 1689/DEL/2013, ITA NO. 6260/DEL/2013 MAJESTIC HOTELS LTD. 5 IS NOT SHOWN TO US AS TO WHICH FINDINGS OF THE TRIB UNAL IS EITHER WITHOUT ANY EVIDENCE OR MATERIAL OR IT IS CONTRARY TO THE EVIDENCE, TO TERM IT AS PE RVERSE. THUS, THERE IS NO SCOPE FOR INTERFERENCE BY THIS COURT ON THE AFORENOTED FINDINGS OF FACT RECOR DED BY THE TRIBUNAL. FURTHER HONOURABLE MUMBAI HIGH COURT IN CIT V RELIA NCE UTILITIES LIMITED 313 ITR 340 HAS HELD THAT 10. IF THERE BE INTEREST-FREE FUNDS AVAILABLE TO AN AS SESSEE SUFFICIENT TO MEET ITS INVESTMENTS AND AT THE SAME TIME THE ASSESSEE HAD RAISED A LOAN IT CAN BE PRESUMED THAT THE INVESTMENTS WERE FROM THE INTEREST-FREE FUNDS AVAILABLE. IN OUR OPINION THE SUPREME COURT IN EAST INDIA PHARMACEUTICAL WORKS LTD.S CASE (SUPRA) HAD THE OC CASION TO CONSIDER THE DECISION OF THE CALCUTTA HIGH COURT IN WOOLCOMBERS OF INDIA LTD.S CASE (SUPRA) WHERE A SIMILAR ISSUE HAD ARISEN. BEFORE THE SUPREME COURT IT WAS ARGUED THAT IT SHOULD HAVE BEEN PRESUMED THAT IN ESSENCE AND TRUE CHARACTER THE TAXES WERE PAID OUT OF THE PROFITS OF THE RELEVANT YEAR AND NOT OUT OF THE OVERDRAFT ACCOUNT FOR THE RUNNING OF THE BUSINESS AND IN THESE CIRCUMSTANCES THE APPELLANT WAS ENTITLED TO CLAIM THE DEDUCTIONS. THE SUPREME COURT NOTED THAT THE ARGUMENT HAD CONSIDERABLE FORCE, BUT CONSIDERING THE FACT TH AT THE CONTENTION HAD NOT BEEN ADVANCED EARLIER IT DID NOT REQUIRE TO BE ANSWERED. IT THEN NOTED THAT IN WOOLCOMBERS OF INDIA LTD.S CASE (SUPRA) THE CALCUTTA HIGH COURT HAD COME TO THE CON CLUSION THAT THE PROFITS WERE SUFFICIENT TO MEET THE ADVANCE TAX LIABILITY AND THE PROFITS WERE DEPOSITED IN THE OVERDRAFT ACCOUNT OF THE ASSESSEE AND IN SUCH A CASE IT SHOULD BE PRESUMED T HAT THE TAXES WERE PAID OUT OF THE PROFITS OF THE YEAR AND NOT OUT OF THE OVERDRAFT ACCOUNT FO R THE RUNNING OF THE BUSINESS. IT NOTED THAT TO RAISE THE PRESUMPTION, THERE WAS SUFFICIENT MATERIA L AND THE ASSESSEE HAD URGED THE CONTENTION BEFORE THE HIGH COURT. THE PRINCIPLE THEREFORE WOULD BE THAT IF THERE ARE FUNDS AVAILABLE BOTH INTEREST-FREE AND OVERDRAFT AND/OR L OANS TAKEN, THEN A PRESUMPTION WOULD ARISE THAT INVESTMENTS WOULD BE OUT OF THE IN TEREST-FREE FUND GENERATED OR AVAILABLE WITH THE COMPANY, IF THE INTEREST-FREE FU NDS WERE SUFFICIENT TO MEET THE INVESTMENTS. IN THIS CASE THIS PRESUMPTION IS ESTABLISHED CONSI DERING THE FINDING OF FACT BOTH BY THE CIT (APPEALS) AND ITAT. FROM ABOVE JUDICIAL PRECEDENTS IT IS APPARENT THAT IF THE ASSESSEE HAS INTEREST FREE FUNDS MORE THAN AMOUNT OF INVESTMENT MADE IN NON-IN TEREST LOANS, THEN IN ABSENCE OF ANY NEXUS BY THE REVENUE, DISALLOWANCE OF INTERE ST CANNOT BE MADE. IN THE PRESENT CASE THE STATUS OF THE INTEREST FREE FUND S VARIABLE WITH THE ASSESSEE AS AT 31.3.2008 IS AS UNDER:- SR NO PARTICULARS AMOUNT IN RS. 1 SHARE CAPITAL 35,83,28,030/- 2 SHARE APPLICATION MONEY 56,23,930/- TOTAL 36,39,51,960/- LESS :- 3 MISCELLANEOUS EXPENDITURE , DEFERRED REVENUE EXPENDITURE AND PROFIT AND LOSS ACCOUNT DEBIT BALANCE 22,89,78,092/- ITA NO. 1689/DEL/2013, ITA NO. 6260/DEL/2013 MAJESTIC HOTELS LTD. 6 4 NON-INTEREST BEARING FUNDS AVAILABLE WITH THE ASSESSEE AS AT 31.3.2008 13,49,73,868/- FROM ABOVE ANALYSIS IT IS APPARENT THAT ASSESSEE HA S HUGE INTEREST FREE FUND AVAILABLE WITH IT AND THEREFORE THE DISALLOWANCE U/ S 36(1) (III) ON ACCOUNT OF ADVANCES GIVEN TO OTHER PARTIES FROM OF INTEREST CA NNOT BE DISALLOWED. THEREFORE WE CONFIRM THE ORDER OF CIT (A) IN DELETING THE DISALL OWANCE OF RS. 24, 05,333/- ON ACCOUNT OF AMOUNTS ADVANCED TO SISTER CONCERNS WITH OUT CHARGING INTEREST. HENCE APPEAL OF THE REVENUE IS DISMISSED. 07. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ITA NO 6260/DEL/2013 A Y 2010-11 (ASSESSEES APPEAL ) 08. THIS APPEAL IS PREFERRED BY ASSESSEE AGAINST THE DI SALLOWANCE OF CLUB MEMBERSHIP FEES OF RS 1,32,092/- HOLDING THAT THESE ARE OF PE RSONAL NATURE AND AGAINST THE DISALLOWANCE OF INTEREST OF RS 36,93,872/-. 09. THE BRIEF FACTS OF DISALLOWANCE ON ACCOUNT OF CLU B MEMBERSHIP IS THAT ASSESSEE HAS OBTAINED CORPORATE MEMBERSHIP FEES OF THE CLUB AND PAID RS 1,00,000/- AS CORPORATE MEMBERSHIP FEES AND RS 32,092/- AS SUBSC RIPTION FOR THE COMPANY AND ITS STAFF . AO HAS DISALLOWED THE EXPENDITURE HOLDING T HAT IT IS NOT REQUIRED FOR THE PURPOSES OF THE BUSINESS. CIT (A) HAS ALSO CONFIRM ED THE DISALLOWANCE ON ACCOUNT OF PERSONAL EXPENSES. 10. WE HAVE CAREFULLY CONSIDERED THE ISSUE. WE NOTICE T HAT THE HONBLE SUPREME COURT HAS HELD THAT THE CLUB MEMBERSHIP FEES PAID FOR EMP LOYEES IS ALLOWABLE U/S 37 OF THE ACT. BEFORE CIT (A) ASSESSEE HAS GIVEN DETAILE D LIST OF PERSONS FOR WHOM THE MEMBERSHIP IS TAKEN. THEREFORE IN VIEW OF THE DEC ISION OF HONOURABLE SUPREME COURT THE ORDER OF CIT (A) IS REVERSED AND DISALL OWANCE OF CLUB MEMBERSHIP OF RS 1,32,092/- IS DELETED. GROUND NO 1 OF THE APPEAL IS ALLOWED. ITA NO. 1689/DEL/2013, ITA NO. 6260/DEL/2013 MAJESTIC HOTELS LTD. 7 11. SECOND GROUND OF APPEAL IS AGAINST THE DISALLOWANCE OF INTEREST EXPENDITURE OF RS. 29,63,872/-. BEFORE US LD AR AND DR BOTH AGREED TH AT FACTS AND CIRCUMSTANCES OF THIS GROUND ARE EXACTLY THE SAME AS PER APPEAL OF THE REVENUE FOR AY 2008-09 WHICH IS TAKEN UP TOGETHER. WE HAVE ALREADY DECIDE D THE ISSUE OF THE INTEREST DISALLOWANCE IN CASE OF THE ASSESSEE FOR AY 2008-0 9 AS PER THIS COMMON ORDER WHEREIN WE HAVE HELD THAT AS THE ASSESSEE IS HAVING FAR MORE INTEREST FREE FUNDS THAN THE AMOUNT OF ADVANCES GIVEN TO SISTER CONCERN WITHOUT INTEREST NO DISALLOWANCES CAN BE MADE. IN THIS YEAR ALSO ASSE SSEE HAS FAR MORE INTEREST FREE FUNDS AVAILABLE AND THE DISALLOWANCE IS ALSO MADE ON ACCOUNT OF INTEREST FREE ADVANCES TO SAME PARTIES THEREFORE ACCORDINGLY T HIS GROUND OF APPEAL IS ALLOWED. 12. IN THE RESULT APPEAL OF THE ASSESSEE FOR AY 2010-11 IS ALLOWED. 13. BY THIS ORDER, APPEAL NO 1689/DEL/2013 FOR AY 2008- 09 PREFERRED BY REVENUE IS DISMISSED AND APPEAL OF THE ASSESSEE FOR AY 2010-11 IN ITA NO 6260/DEL/2013 IS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 06/11/2015 ) SD/- SD/- (C.M.GARG) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 06/11/2015 *B. RUKHAIYAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO. 1689/DEL/2013, ITA NO. 6260/DEL/2013 MAJESTIC HOTELS LTD. 8 DATE INITIAL 1. DRAFT DICTATED ON 04/11/2015 2. DRAFT PLACED BEFORE AUTHOR 05/11/2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.