AJAY KUMAR MITTAL, J. - (1.) THIS order shall dispose of IT Appeal Nos. 537 of 2006, 127 of 2007 and 255 of 2008 as according to the learned counsel for the parties identical questions are involved therein. For brevity, the facts are being extracted from IT Appeal No. 537 of 2006.
(2.) THIS appeal has been preferred by the Revenue under S. 260A of the IT Act, 1961 (in short "the Act") against the order dt. 30th Dec., 2005 passed by the Income-tax Appellate Tribunal, Delhi Bench "F", New Delhi (hereinafter referred to as "the Tribunal") in ITA No. 3550/Del/2000 for the asst. yr. 1996-97. The appeal was admitted by this Court on 22nd July, 2008 for determination of the following substantial questions of law : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in confirming the order of the CIT(A) regarding deletion of Rs. 13,76,990, made by the AO on account of rent undercharged by the assessee from its sister concern ? (ii) Whether on the facts and circumstances of the case, the Tribunal is right in law in allowing Rs. 24,93,443 as depreciation on building for the full year, whereas the AO has established that the said fixed asset was not completed and put to use on or before 30th Sept., 1995 ? (iii) Whether on the facts and circumstances of the case, the Tribunal is right in allowing Rs. 66,04,880 as depreciation on plant and machinery for the full year, when the AO has established that the plant and machinery was not put to use on or before 30th Sept., 1995 ? (iv) Whether on the facts and circumstances of the case the Tribunal is right in law in allowing deduction of Rs. 43,52,604 as interest paid on money advanced to its sister concern free of interest in the light of judgment of this Court in CIT vs. Abhishek Industries Ltd. (2006) 205 CTR (P&H) 304, dt. 4th Aug., 2006 ?" The facts, in brief, necessary for adjudication as pleaded in the appeal are that the assessee filed its return of income on 28th Nov., 1996 declaring a loss of Rs. 20,83,260. The assessment in this case was completed on 16th March, 1999 at an income of Rs. 1,46,35,810. The disallowances made by the AO which are relevant for the purposes of present appeal are as under : (a) Rs. 13,76,990 on account of rent undercharged from M/s Mark Exhaust Ltd., a sister concern of the assessee; (b) Rs. 24,93,443 as depreciation, which was allowed @ 5 per cent on the additions made to the factory buildings to the tune of Rs. 4,98,68,854 instead of 10 per cent claimed by the assessee on the ground that the building was not complete and fit for use before 30th Sept., 1995; (c) depreciation on Rs. 5,28,39,089 on the plant and machinery was restricted to 12.5 per cent only as against claim of the assessee at 25 per cent as the assessee had failed to produce any cogent evidence of start of production prior to 30th Sept., 1995 and, thus, enhancing the income by Rs. 66,04,880; (d) Rs. 43,52,604 out of interest claimed as expenses on account of interest paid on money advanced to its sister concern free of interest.
(3.) FEELING aggrieved, the assessee filed an appeal before the CIT(A) who vide order dt. 23rd May, 2000 deleted the aforesaid additions. Against the order of the CIT(A), the Revenue approached the Tribunal who vide order dt. 30th Dec., 2005 dismissed the appeal. Hence, the present appeal by the Revenue.;