N.P.GUPTA, J. - (1.) THESE four appeals arise out of different orders of the Tribunal, passed on different dates, and relate to different assessment years, but relate to the same assessee. Likewise, various questions were involved in the impugned judgments; however, all these appeals have been admitted only on one substantial question of law, vide different orders. The question as framed in ITA Nos. 12, 99, 124 reads as under, while in ITA No. 142 the language is bit differently worded but in substance that also covers the same controversy: Whether on the facts and in the circumstances of the case deletion of additions made by AO under Section 40A(2)(a) of the Act were founded by ignoring the relevant considerations which were required to be taken into account in terms of sub -s. (2)(a) of Section 40A of the Act?
(2.) THE necessary facts in this regard are that the assessee entered into a lease agreement to have full finance for purchase of an effluent and a bottling plant, and other assets on lease for five years with another company of this group, viz. M/s Harbert Son Ltd. and MacDowell and Co. Ltd. and claimed deduction for the lease rent paid to the lessee. The AO observed that these two companies were substantially owned by Vijay Mallya, whose United Breweries own the assessee company. It was also observed by the AO that the lease rent, as paid, gave annual rate of return of 33.6 per cent. Since in his opinion these companies were related to the assessee, hence provisions of Section 40A(2)(a) were applicable. It was also considered that the prime lending rates of bank was 15.6 per cent, therefore, he allowed the deduction @ 15.6 per cent, and made additions of the remaining amount. The matter was carried in appeal, and the learned CIT(A) deleted the additions. The learned CIT(A) had found that it is a fact on record that this issue has already been examined in the earlier assessment years by the AO while completing assessment under Section 143(3), and they have accepted the claim of the assessee with regard to payment of lease rent. Admittedly, the AO has not brought any evidence or material for departure from settled issue, and therefore, no useful purpose can be served by setting aside the items. Then even de hors this, the learned CIT(A) proceeded to consider the matter on merits, and considered that in absence of any proper evidence, and also considering the fact that it is a contractual liability under a valid agreement, and there is no justification to draw adverse inference arbitrarily. It was also held that the AO cannot compel any businessman to take loans from any bank where the interest charged is less than the rate charged by the outsider, and the difficulty to obtain huge loan was understood, and comparable case was not confronted to the assessee. It was held that it is required to be decided by the businessmen themselves, after taking expediency and interest of the business, and it is upto them how to protect their interest of the business. It was also considered that no material evidence was brought on record to establish that the rate of rent are not reasonable, or transactions of lease are bogus. As such, it was found that there is no reason for making any disallowance. Thus, the addition was deleted.
(3.) THE Revenue carried the matter in appeal before the Tribunal, and the learned Tribunal found that the assessee has been paying this amount as per the agreement in earlier years, which was allowed in the assessment made under Section 143(3) and there is no change in the factual position from the earlier years vis -a -vis the instant year, and lease rent continues to be paid at the same level, and it was also held that there is no material worth the name with the AO justifying deviation from the earlier stand taken by the Revenue, in not accepting this payment of lease rent as per the agreement. Thus, it was found that the CIT(A) rightly dealt with the matter in allowing the assessee's claim. Consequently, the appeal of the Revenue was dismissed.;