ATISH KUMAR MITTAL, J. - (1.) THIS order shall dispose of three IT Appeals bearing IT Appeal Nos. 571, 572 and 573 of 2007. The Revenue has filed passed by the Income -tax Appellate Tribunal, Chandigarh Bench 'A' (hereinafter referred to as 'the Tribunal') in ITA Nos. 196 to 198/Chd/2006 in case of the assessee for the asst. yrs. 1996 -97, 1998 -99 and 1999 -2000, raising the following substantial questions of law for consideration of this Court : "1. Whether on the facts and in the circumstances of the case, Tribunal was right in law in deleting the disallowance of interest of Rs. 9,00,000 on the ground that there is no direct nexus between the borrowings and interest -free advances made to sister concern ? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in sustaining the deletion though interest -free loan was for non -business purpose -
(2.) AFTER notice of motion, we have heard the learned counsel for the parties and gone through the impugned order passed by the Tribunal. In this case, the Tribunal has recorded a finding of fact to the effect that the interest -free loan given to M/s Gujarat Cycles Ltd. was for a business consideration. In view of the said finding of fact, the Tribunal while distinguishing the judgment of this Court in CIT vs. Abhishek Industries Ltd. (2006) 205 CTR (P&H) 304 : (2006) 286 ITR 1 (P&H) has dismissed the appeal of the Revenue while coming to the conclusion that the order of the CIT(A) was correct.
(3.) COUNSEL for the Revenue again while relying upon the judgment of this Court in Abhishek Industries Ltd.'s case (supra), has submitted that from the order of the Tribunal, the aforesaid two substantial questions of law arise for consideration of this Court. On the other hand, counsel for the assessee while referring to the decision of the Supreme Court in S.A. Builders Ltd. vs. CIT(A) (2006) 206 CTR (SC) 631 : (2007) 288 ITR 1 (SC) and Munjal Sales Corporation vs. CIT (2008) 215 CTR (SC) 105 : (2008) 298 ITR 298 (SC), submitted that once a finding of fact has been recorded by the Tribunal to the effect that the interest -free loan given to the sister concern was for a business consideration, then in that situation merely on the basis of the observations made in Abhishek Industries Ltd.'s case (supra), the order of the Tribunal in deleting the disallowance of interest on the ground that there is no nexus between the borrowings and interest -free advances made to sister concern, cannot be quashed.;