- (1.) THE appeal preferred by the Revenue against the judgement and order dated 27.06.2005 passed by the Income Tax Appellate, Tribunal in Income Tax Appeal No. 394/ALLD/94, ITA No. 431/ALLD/94, ITA No. 515/ALLD/95 and Income Tax Appeal No. 688/ALLD/95. This Court admitted the appeal on the substantial question of law framed as question Nos. 1,2, 5 & 6 which are quoted hereunder: -. 1. Whether on the facts and circumstances of the case the Hon'ble Tribunal was justified in law in holding that the first proviso to sec. 145 (1) of the Act did not apply in the present case? 2. Whether, the Hon'ble ITAT was justified in law in holding that the entire deposit received by the respondent was a capital receipt when as per the terms and conditions of the application form itself, there is a condition that a part of the deposit will be deducted as Administrative and Process Charges, if premature payment is taken by the depositors? 5. Whether in view of the facts and in the circumstances of the case, the Hon'ble ITAT erred in law in holding that interest income of Rs.2,80,37,045/ - was not assessable in hands of the respondent due to non charging of interest on the amount due from its agent M/s Sahara India, even though the respondent was a finance company and its business was earning of income by investing its funds? 6. Whether, in view of the facts and in the circumstances of the case, the Hon'ble ITAT erred in holding that interest income of Rs.2,80,37,045/ - did not arise to the assessee due to non charging of interest on amount due from its sister concerns/Partners/directors without appreciating that the respondent by not charging any interest on the amount due from them had abandoned/surrendered its income in their favour and its sister concerns/partners/directors was only a colourable device entered into by them to defraud the revenue.
(2.) THE appeals are related for the assessment year 1990 -1991, 1991 -1992 and the assessee at his own credited a sum of the amount in both the assessment year under the head "Administrative and Process Charges". However, subsequently it contended that the method of accounting followed by the Assessee to work out the Administrative and Process Charges was improper, as it was a capital receipt and not the income of the assessee. Therefore, those amounts were not liable to be taxed. Ultimately the Tribunal after considering the order of this Court passed in the case of CIT Vs. M/s Sahara Investment India Ltd., 2004 266 ITR 641 held that the Administrative and Process Charge credited by the assessee for both the assessment years in its profit and loss account are not the Revenue receipt of the assessee. At this stage also the learned counsel of the Revenue does not dispute the aforesaid proposition of law discussed by this Court in the case as above. Once the point in question has already been determined the substantial question of law framed as No.1 and 2 cannot be said to be substantial question of law and those are determined accordingly.
(3.) THE assessee claimed interest free fund of Rs. 28 Crores which was more than interest free advance of Rs. 18.50 Crores lying with sister concern and its partners/directors. The assessee had stated that it was having found raised on behalf of its sister concern as their agency on which no interest was payable. As per observation of the Appellate Tribunal the assessee failed to produce any such evidence to establish that assessee was having interest free advance of its other sister concern of Rs.28 crores.Since no details were brought on record to establish it, the Appellate Tribunal restored the file of Assessment Officer with the direction to the Assessment Officer to consider on the basis of evidence as may be furnished by the assessee as to whether the assessee for the assessment year 1990 -1991 and 1991 -1992 was having interest free advances, more than interest free advances given by it, and no interest bearing fund was utilized to give interest free advances to its sister concern/partners/directors. Therefore, we are of the view that let the Assessment Officer take a decision accordingly. On the aforesaid backdrop we are of the view that it is not the stage to adjudicate upon the substantial question of law framed as question No. 5 and 6.;