A.N.Verma, J. - (1.) At the instance of the Revenue, the following questions have been referred by the Income-tax Appellate Tribunal, Delhi Bench 'C', in pursuance of the direction issued by this court under section 256(2) of the Income-tax Act, 1961 : " 1. Whether, on the facts and circumstances of the case, there was material before the Tribunal to hold that there was no agreement to charge interest from the parties?
(2.) Whether, on the facts and circumstances of the case, the Tribunal was legally justified in holding that no interest accrued to the assessee in the assessment year in question?" 2. The relevant assessment year is 1974-75, The assessee is the sole selling agent of Raza Textiles Ltd., Rampur. As per its balance-sheet, the following amounts were found to have been advanced to three companies indicated below which incidentally happen to be under the same management as Raza Textiles Ltd. : Rs. 1. Sir J. P. Srivastava and Sons Rampur Ltd. 3,26,774 2. Sir f. P. Srivastava and Sons (P.) Ltd., 70,592 Rampur
(3.) Messrs. Cawnpur Dyeing and Cloth 3,78,497Printing Co., Kanpur 3. The amount shown against Sir J. P. Srivastava and Sons Rampur Ltd. was advanced by the assessee in instalments between March 10, 1965, and April 14, 1969. The debtor-company credited the assessee with interest up to the period ending June 30, 1969, whereafter no interest was charged nor credited nor was the same claimed by the debtor company as deduction in the computation of its own income. Similarly, advances were made in favour of J. P. Srivastava and Sons Pvt Ltd., Kanpur, and interest was charged on the advances made only up to June 30, 1969, whereafter again no interest was charged in the subsequent years including the year in question. The position in regard to the third company was also the same. Accordingly, the assessee did not show any interest from any of these debtor-companies in its return for the relevant assessment year.;