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TMI Blog2017 (1) TMI 1439X X X X Extracts X X X X X X X X Extracts X X X X ..... d and substantial questions of law involved therein are same, hence all are being decided by this common judgment. 2. Heard Sri Alok Mathur, Advocate, for Revenue-appellant and perused the record. 3. All these appeals under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act, 1961 ) have arisen from judgment and order dated 11.04.2005 passed by Income Tax Appellate Tribunal, Lucknow Bench, Lucknow (hereinafter referred to as Tribunal ) and were admitted on the following substantial questions of law: I. Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal is justified in holding that the assessee's claim for deduction of interest was allowable in full, despite t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as CIT(A) ) who allowed the appeal partly vide order dated 25.08.1998. Revenue preferred Appeal before Tribunal with regard to relief granted by CIT(A) for ₹ 1,54,480/- being amount of interest allegedly charged stating that funds were diverted to sister Concern M/s. J.P. Industries for non-business purposes. Tribunal found that on the same issues between the same parties for Assessment Year 1990-91, Revenue has conceded the matter in favour of Assessee in Income Tax Appeal No. 1288/Alld/1993 and the issue was covered by the said judgment. That being so and the matter has already stood finally determined between the parties in respect to earlier Assessment Year, we find no error on the part of Tribunal in following the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to above) at a very low rate of interest and the entire difference of interest is being charged to the assessee. The assessee is not a finance company. It is engaged in the manufacture of sugar. No business purpose of the assessee-company is served by such lendings to its directors/shareholders. It cannot be said that it is expedient in the interest of business or is laid out for the purpose of the business of the assessee. It is not even a case where employees of the company are being lent some small amounts at a lower rate of interest with a view to keep them happy and satisfied. The amount of interest paid each year payable on account of the loans to directors is very substantial and this fact cannot be glossed over by saying tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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