$~8, 11 And 12 In The High Court Of Delhi At New Delhi % Date Of Decision: 12[Th] April, 2022 + Ita 930/2019Principal Commissioner Of Income Tax, (Central) -3 v. M/S Gahoi Buildwell (P) Ltd

NEUTRAL CITATION NO: 2022/DHC/002050 $~8, 11 and 12 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: 12[th] April, 2022 + ITA 930/2019PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL) -3 ..... Appellant Through: Ms. Vibhooti Malhotra, Sr.Standing counsel with Mr.Shailendra Singh, Jr.Standing counsel with Mr.Udit Sharma, Advocates versus M/S GAHOI BUILDWELL (P) LTD. ..... Respondent Through: None. +ITA 936/2019PRINCIPAL COMMISSIONER OF INCOME TAX, ( CENTRAL)-3 ..... Appellant Through: Ms.Vibhooti Malhotra, Sr.Standing counsel with Mr.Shailendra Singh, Jr.Standing counsel with Mr.Udit Sharma, Advocates versus M/s GAHOI BUILDWELL (P) LTD. ..... Respondent Through: None. + ITA 952/2019PRINCIPAL COMMISSIONER OF INCOME TAX , ( CENTRAL)-3 ..... Appellant Through: Ms.Vibhooti Malhotra, Sr.Standing counsel with Mr.Shailendra Singh, Jr.Standing counsel with Mr.Udit Sharma, Advocates versus M/S GAHOI BUILDWELL (P) LTD. ..... Respondent Through: None. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE DINESH KUMAR SHARMA ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 1 of 27 J U D G M E N T DINESH KUMAR SHARMA,J (ORAL): CM APPL. 47931/2019 (delay) in ITA 930/2019CM APPL. 48109/2019 (delay) in ITA 936/2019 &CM APPL.49116/2019 (delay) in ITA 952/2019 1.The present applications have been filed by the appellant for condonation of delay of 47 days in filing the present appeals. condonation of delay of 47 days in filing the present appeals. 2.For the reasons mentioned in the applications, the delay of 47 days in filing the appeals is condoned. filing the appeals is condoned. 3.Accordingly, all the applications stand disposed of . CM APPL. 48108/2019 in ITA 936/2019 (exemption) 4.Exemption allowed, subject to all just exceptions. 5.Application stands disposed of. 5.Application stands disposed of. ITA 930/2019, ITA 936/2019 & ITA 952/2019 6.The present three ITAs bearing ITA No. 930 of 2019 (AY- 2009-10), ITA No. 936 of 2019 (AY- 2007-2008) and ITA No. 952 of 2019 (AY -2008-2009) have been filed by the appellant challenging the impugned order of Income Tax Appellate Tribunal (ITAT) dated 29.03.2019 whereby the appeals filed by the Revenue were dismissed. ITAT also disposed of cross-objections raised by the Respondent. ITA No. 936 of 2019 (AY- 2007-2008) and ITA No. 952 of 2019 (AY -2008-2009) have been filed by the appellant challenging the impugned order of Income Tax Appellate Tribunal (ITAT) dated 29.03.2019 whereby the appeals filed by the Revenue were dismissed. ITAT also disposed of cross-objections raised by the Respondent. 7.In ITA No. 930 of 2019, the appellant department has submitted that from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: A.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of the prevailing law, the ITAT has erred in confirming the Order of the ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 2 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 CIT(A) when the Respondent has failed to provide the bifurcation of the brokerage and commission expenses incurred, before the assessing officer? A.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of the prevailing law, the ITAT has erred in confirming the Order of the ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 2 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 CIT(A) when the Respondent has failed to provide the bifurcation of the brokerage and commission expenses incurred, before the assessing officer? B.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of the CIT(A) while ignoring the fact that during the assessment proceedings, the Respondent had failed to establish that the interest bearing loans have not been utilized for the purpose of giving interest free advances to related and unrelated parties? prevailing law, the ITAT has erred in confirming the Order of the CIT(A) while ignoring the fact that during the assessment proceedings, the Respondent had failed to establish that the interest bearing loans have not been utilized for the purpose of giving interest free advances to related and unrelated parties? C.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of CIT(A) and ignoring the finding of the assessing officer that the Respondent had failed to establish the said buildings were being used for its business purpose? prevailing law, the ITAT has erred in confirming the Order of CIT(A) and ignoring the finding of the assessing officer that the Respondent had failed to establish the said buildings were being used for its business purpose? D.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of the CIT(A) completely ignoring the fact that the Director of the Respondent had estimated profit of Rs.2.5Crore in his statement recorded on 24.02.2009 whereas the loss computed on the close of the balance sheet on 31.03.2009 was Rs. 5.4 Crore? prevailing law, the ITAT has erred in confirming the Order of the CIT(A) completely ignoring the fact that the Director of the Respondent had estimated profit of Rs.2.5Crore in his statement recorded on 24.02.2009 whereas the loss computed on the close of the balance sheet on 31.03.2009 was Rs. 5.4 Crore? E.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in appreciating the fact that the Respondent could not substantiate the reasons for the variations in the profit figures between the above two dates? prevailing law, the ITAT has erred in appreciating the fact that the Respondent could not substantiate the reasons for the variations in the profit figures between the above two dates? F.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in appreciating the fact that the prevailing law, the ITAT has erred in appreciating the fact that the ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 3 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 rental loss claimed by the Respondent was not allowable as per the provisions of Section 22 read with Section 23 of the Act as the ALV of the properties in question, had not charged and therefore the loss claimed under the said head was not allowable? F.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in appreciating the fact that the prevailing law, the ITAT has erred in appreciating the fact that the ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 3 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 rental loss claimed by the Respondent was not allowable as per the provisions of Section 22 read with Section 23 of the Act as the ALV of the properties in question, had not charged and therefore the loss claimed under the said head was not allowable? G.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in ignoring the findings of the assessing officer that utilization and mobilisation of the sum so received toward the maintenance of the commercial complex/ replacement of assets was only an application of the income received by the Respondent at the time of sale as a part of the sale consideration? prevailing law, the ITAT has erred in ignoring the findings of the assessing officer that utilization and mobilisation of the sum so received toward the maintenance of the commercial complex/ replacement of assets was only an application of the income received by the Respondent at the time of sale as a part of the sale consideration? H.Whether on facts and in the circumstances of the case and also the prevailing law, the ITAT has erred in confirming the order of the CIT(A) and dismissing the Revenue's appeal? prevailing law, the ITAT has erred in confirming the order of the CIT(A) and dismissing the Revenue's appeal? I.Whether, the CIT(A) was justified in ignoring the findings of the Ld. assessing officer when there were incriminating documents? assessing officer when there were incriminating documents? J.The Appellant craves leave, to modify, add or forego any grounds of appeal at any time before or during the hearing of the present appeal. appeal at any time before or during the hearing of the present appeal. 8.In ITA No. 936 of 2019, the appellant department has submitted that from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: A.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in estimating the amount of expenses incurred in earning the dividend income ignoring the detailed working provided in Section 14A of the Income tax Act, 1961 read with Rule 80 of the Income Tax Rules, 1962? prevailing law, the ITAT has erred in estimating the amount of expenses incurred in earning the dividend income ignoring the detailed working provided in Section 14A of the Income tax Act, 1961 read with Rule 80 of the Income Tax Rules, 1962? ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 4 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 B.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of the CIT(A) when the Respondent had failed to provide the bifurcation of the brokerage and commission expenses incurred, before the assessing officer? prevailing law, the ITAT has erred in confirming the Order of the CIT(A) when the Respondent had failed to provide the bifurcation of the brokerage and commission expenses incurred, before the assessing officer? C.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of CIT(A) when the Respondent had failed to rebut the presumption u/s.132(4A) that the Respondent has received the interest on the delayed payment? prevailing law, the ITAT has erred in confirming the Order of CIT(A) when the Respondent had failed to rebut the presumption u/s.132(4A) that the Respondent has received the interest on the delayed payment? C.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of CIT(A) when the Respondent had failed to rebut the presumption u/s.132(4A) that the Respondent has received the interest on the delayed payment? prevailing law, the ITAT has erred in confirming the Order of CIT(A) when the Respondent had failed to rebut the presumption u/s.132(4A) that the Respondent has received the interest on the delayed payment? D.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of the CIT(A) when the Respondent had failed to establish before the assessing officer that the interest bearing loans have not been utilised for the purpose of giving interest free advances? prevailing law, the ITAT has erred in confirming the Order of the CIT(A) when the Respondent had failed to establish before the assessing officer that the interest bearing loans have not been utilised for the purpose of giving interest free advances? E.Whether on facts and in the circumstances of the case and also prevailing law, the. ITAT has erred in confirming the Order of the CIT(A) where as during the assessment proceedings the Respondent had failed to prove the identity creditworthiness and genuineness of the share applicant despite being provided sufficient opportunity by the assessing officer? prevailing law, the. ITAT has erred in confirming the Order of the CIT(A) where as during the assessment proceedings the Respondent had failed to prove the identity creditworthiness and genuineness of the share applicant despite being provided sufficient opportunity by the assessing officer? F.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has failed to appreciate the findings of the assessing officer, that during the assessment proceedings, the bill/vouchers submitted by the Respondent did not have prevailing law, the ITAT has failed to appreciate the findings of the assessing officer, that during the assessment proceedings, the bill/vouchers submitted by the Respondent did not have ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 5 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 mandatory/requisite information like TIN No, Bill No and so on, and therefore apparently seemed to be dubious? G.Whether on facts and in the circumstances of the case, the Hon'ble Tribunal has erred in confirming the Order of the CIT(A) and dismissing the appeal preferred by the Revenue. Tribunal has erred in confirming the Order of the CIT(A) and dismissing the appeal preferred by the Revenue. H.Whether the impugned Order passed by the Ld. Tribunal has erred as the Order of CIT(A) was passed in ignorance of the findings of the assessing officerthat there existed incriminating circumstances. as the Order of CIT(A) was passed in ignorance of the findings of the assessing officerthat there existed incriminating circumstances. I.The Appellant craves leave, to modify, add or forego any grounds of appeal at any time before or during the hearing of the present appeal. of appeal at any time before or during the hearing of the present appeal. 9.In ITA No. 952 of 2019, the appellant department has submitted that from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: A.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in ignoring the findings of the assessing officer that while submitting the premise-wise details of the rent paid, the column titled 'Purpose' was left blank by the Respondent? prevailing law, the ITAT has erred in ignoring the findings of the assessing officer that while submitting the premise-wise details of the rent paid, the column titled 'Purpose' was left blank by the Respondent? 9.In ITA No. 952 of 2019, the appellant department has submitted that from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: from the impugned order following substantial questions of law arise, which need to be framed and determined by this court: A.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in ignoring the findings of the assessing officer that while submitting the premise-wise details of the rent paid, the column titled 'Purpose' was left blank by the Respondent? prevailing law, the ITAT has erred in ignoring the findings of the assessing officer that while submitting the premise-wise details of the rent paid, the column titled 'Purpose' was left blank by the Respondent? B.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the commitment charges on account of deficiency of assured lease rent and actual rent paid to the buyer after realisation of sale price? prevailing law, the ITAT has erred in confirming the commitment charges on account of deficiency of assured lease rent and actual rent paid to the buyer after realisation of sale price? C.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of CIT(A) and ignoring the fact that during the assessment proceedings prevailing law, the ITAT has erred in confirming the Order of CIT(A) and ignoring the fact that during the assessment proceedings ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 6 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 the Respondent had failed to establish that interest bearing loans had not been utilized for the purpose of giving interest free advances to related and unrelated parties?. D.Whether on facts and in the circumstances of the case and also prevailing law, the ITAT has erred in confirming the Order of the CIT(A) and has failed to appreciate the findings of the assessing officer that during the assessment proceedings, the bill/vouchers submitted by the Respondent did not have mandatory information like TIN No./Bill No. And thus the same apparently seemed to be dubious? prevailing law, the ITAT has erred in confirming the Order of the CIT(A) and has failed to appreciate the findings of the assessing officer that during the assessment proceedings, the bill/vouchers submitted by the Respondent did not have mandatory information like TIN No./Bill No. And thus the same apparently seemed to be dubious? E.Whether on facts and in the circumstances of the case, the has Tribunal has erred in confirming the Order of the ClT(A) and dismissing the appeal preferred by the Revenue. Tribunal has erred in confirming the Order of the ClT(A) and dismissing the appeal preferred by the Revenue. F.Whether the impugned Order passed by the Tribunal has erred as the Order of CIT(A) was passed in ignorance of the findings of the AO that there existed incriminating circumstances. the Order of CIT(A) was passed in ignorance of the findings of the AO that there existed incriminating circumstances. G.The Appellant craves leave, to modify, add or forego any grounds of appeal at any time before or during the hearing of the present appeal. of appeal at any time before or during the hearing of the present appeal. E.Whether on facts and in the circumstances of the case, the has Tribunal has erred in confirming the Order of the ClT(A) and dismissing the appeal preferred by the Revenue. Tribunal has erred in confirming the Order of the ClT(A) and dismissing the appeal preferred by the Revenue. F.Whether the impugned Order passed by the Tribunal has erred as the Order of CIT(A) was passed in ignorance of the findings of the AO that there existed incriminating circumstances. the Order of CIT(A) was passed in ignorance of the findings of the AO that there existed incriminating circumstances. G.The Appellant craves leave, to modify, add or forego any grounds of appeal at any time before or during the hearing of the present appeal. of appeal at any time before or during the hearing of the present appeal. 10.In ITA 930/2019, the department has assailed the order of ITAT on the ground that the Tribunal has erred by upholding the Order of CIT(A) wherein it deleted Rs.22,97,392/- added by assessing officer on account of Brokerage and Commission. The order has also been assailed on the ground that CIT (A) had wrongly deleted Rs. 2,19,47,951/- added by assessing officer on account of 'Commitment Charges'. It has been submitted that ITAT has wrongly followed its the ground that the Tribunal has erred by upholding the Order of CIT(A) wherein it deleted Rs.22,97,392/- added by assessing officer on account of Brokerage and Commission. The order has also been assailed on the ground that CIT (A) had wrongly deleted Rs. 2,19,47,951/- added by assessing officer on account of 'Commitment Charges'. It has been submitted that ITAT has wrongly followed its ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 7 of 27 11. 12. finding pertaining to AY 2008-09 and failed to consider the findings of the Assessing Officer in this regard. The Department has submitted that the Tribunal has erred by upholding the Order of CIT(A) wherein it had partly allowed the appeal of the assessee by allowing relief of Rs.32,58,548/- and sustained the balance amount of Rs.3,18,000/- from the total disallowance of Rs. 35,76,548/- as added by the Assessing Officer on account of 'Balance Interest'. It was submitted that the Tribunal has wrongly followed its findings pertaining to the AY 2008-09 on the ground of no change in the fact that the assesee had huge surplus fund available. The department has submitted that the Tribunal has erred by upholding the Order of CIT(A) wherein it had deleted Rs.7,68,370/- added by Assessing officer on account of ‘Depreciation disallowed'. The order has also been assailed on the ground that Tribunal has erred by upholding the Order of CIT(A) wherein it had deleted Rs. 5,15,34,000/- added by AO on account of 'Loss disallowed'. The department submitted that the tribunal has erred by upholding the order of CIT(A) wherein it had deleted Rs.5,73,898/- added by AO as 'disallowance under house property’. The department has submitted that in the impugned order the Tribunal has erred by sustaining the finding of CIT (A) for deleting the addition of Rs.1,37,33,018/-, as added by the AO on account of 'Sinking fund’.The appellant has submitted that the impugned order is perverse and ought to be set aside. In ITA 936 of 2019 pertaining to AY 2007-08, the department has assailed the impugned order on the ground that the Tribunal has erred ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 8 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 In ITA 936 of 2019 pertaining to AY 2007-08, the department has assailed the impugned order on the ground that the Tribunal has erred ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 8 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 by ignoring the findings of the AO in regard to the addition of Rs.91,28,981/- on account of disallowance under Section 14A. The department stated that ITAT has wrongly upheld the order of the CIT(A) whereby an amount of Rs.90,28,981/- was deleted by stating that the assessee had earned dividend income of Rs.82,41,610/-, which were mostly from the mutual funds. The department has submitted that the Tribunal has erred by sustaining the Order of the CIT (A) regarding deletion of Rs. 82,83,857/- which were added to the income of the assessee by the Order of AO on account of Brokerage and commission in terms of provisions of Section 37 of the Act. The department has also submitted that in the impugned order the Tribunal has wrongly sustained the deletion of the addition made by AO on account of Interest on delayed payments of Rs.7,48,856/-. The department has stated the said addition was partly deleted by the CIT(A) in so far as it allowed relief to the assesee for an amount of Rs. 61,39,630/- whereas the remaining amount of Rs.21,43,957/- was sustained against the assessee. The department has challenged the impugned order on the ground that it has erred by sustaining the finding CIT(A) whereby the addition of Rs 7,48,856/- made by the AO on account of Delayed payment, was deleted by the CIT(A). The impugned order has also been assailed on the ground that the tribunal has erred by sustaining the deletion of the addition of Rs.81,98,798/- made by the AO on account of disallowance of interest, as deleted by the CIT(A). The department submitted that the tribunal has wrongly held that none of such advances could be considered to be interest ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 9 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 14. 15. bearing funds and therefore the finding of the tribunal is not acceptable in so far as on this ground, the addition was made by AO after due consideration of reply by the assessee. The department has challenged the order of the Tribunal on the ground that it has erred by sustaining the Order of the CIT(A) regarding the deletion of addition of Rs.17,65,000/- made by AO on account of the Unexplained cash credit under Section 68 of the Act. The finding of the tribunal that above amount was not a fresh credit appearing in the books of accounts of the assessee is not correct. The findings have also been challenged on the ground that the order of CIT (A) regarding deletion of Rs.5,95,27,614/- as added by the AO on account of the Deemed dividend under Section 22(2)(e) of the Act of has wrongly been upheld. It has been submitted that the tribunal has erred in sustaining the Order of the CIT(A) regarding deletion of Rs. 10,20,212/- as added by the AO on account of expenses disallowed to the assessee. The impugned order has been challenged to be perverse and ought to be set aside. In ITA 952 of 2019 pertaining to the year 2008-09, the department has submitted that the tribunal has erred by ignoring the findings of the AO in so far as it made addition of Rs. 22,80,000/- on account of rent disallowed. The order has also been challenged on the ground that tribunal has erred by ignoring the findings of the AO regarding the addition of Rs.2,54,24,680/- made on account of 'Commitment Charges' and the findings of the assessing officer has wrongly been ignored by the tribunal. The order of the tribunal has also been challenged on the ground that it has erred by passing the impugned ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 10 of 27 In ITA 952 of 2019 pertaining to the year 2008-09, the department has submitted that the tribunal has erred by ignoring the findings of the AO in so far as it made addition of Rs. 22,80,000/- on account of rent disallowed. The order has also been challenged on the ground that tribunal has erred by ignoring the findings of the AO regarding the addition of Rs.2,54,24,680/- made on account of 'Commitment Charges' and the findings of the assessing officer has wrongly been ignored by the tribunal. The order of the tribunal has also been challenged on the ground that it has erred by passing the impugned ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 10 of 27 Order wherein it has upheld the Order of CIT(A) regarding deletion of Rs. 1,06,13,292/- which were added to the income of the assessee on account of 'Balance interest Disallowed. It has been submitted that the tribunal has wrongly upheld the order of CIT (A) regarding the deletion of Rs. 6,48,726/- on account of 'Expenses disallowed'. The impugned order has been stated to be perverse and ought to be set aside. 16. Ms. Vibhooti Malhotra, learned standing counsel for the department/appellants stated that for all the three years the tribunal has fallen into a grave error and therefore, the impugned orders are liable to be set aside. It has been submitted that the substantial questions of law as raised in the appeals need to be framed by this court. Ms. Vibhooti Malhotra stated that the appeals filed by the appellants need deeper examination. 17. We have heard Ms.Vibhooti Malhotra, learned standing counsel for the department/appellants. 18. Before embarking on the facts as raised in the appeals it is necessary to examine the scope of jurisdiction under Section 260A. 19.The scope of jurisdiction in Section 260A is very well settled. It is a settled proposition that ITAT is the final arbiter of the facts. High Court can interfere in the order of the ITAT only if there is substantial question of law or there is manifest illegality or it suffers from perversity. 20.It is settled proposition of law that the High Court can entertain an appeal against the order of ITAT only if it involves any substantial question of law. The ITAT is considered to be the final arbiter of the ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 11 of 27 22. facts and if there is a finding on the facts, the settled law is that High Court should be slow in interfering into the same. Reference can be made to the judgment of the Apex Court in M.Janardhana Rao vs. Joint Commissioner of Income Tax, (2005) 2 SCC 324 and judgments of this Court in Principal Commissioner of Income Tax vs. BhadaniFinaciers Pvt. Ltd., 2021 SCC Online Delhi 4430 and in Goodyear India Ltd. vs. CIT, 2000 SCC Online Del 1023. In the case of M.Janardhana Rao(supra), the Apex Court has inter alia held as under: “14. Without insisting on the statement of substantial question of law in the memorandum of appeal and formulating the same at the time of admission, the High Court is not empowered to generally decide the appeal under Section 260A without adhering to the procedure prescribed under Section 260A. Further, the High Court must makeevery effort to distinguish between a question of law and asubstantial question of law. In exercise of powers underSection 260A, the findings of fact of the Tribunal cannot bedisturbed. It has to be kept in mind that the right of appeal isneither a natural nor an inherent right attached to thelitigation. Being a substantive statutory right, it has to beregulated in accordance with law in force at the relevanttime. The conditions mentioned in Section 260A must bestrictly fulfilled before an appeal can be maintained underSection 260A. Such appeal cannot be decided on merelyequitable grounds.” (emphasis supplied) In BhadaniFinaciers Pvt. Ltd.’s case (supra), this Court has observed as under: (emphasis supplied) In BhadaniFinaciers Pvt. Ltd.’s case (supra), this Court has observed as under: “8.Substantial” means “having substance, essential, real, of sound worth, important or considerable.” To be “substantial”, a question of law must be debatable, not previously settled. The Supreme Court and several High ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 12 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 Courts have held that a substantial question of law is involved if it directly or indirectly affects substantial rights of the parties or it is of general public importance, it is an open question in the sense that the issue has not been settled by a pronouncement of the Court or it is not free from difficulty or it calls for a discussion for alternate views. AHigh Court under Section 260A of the Act has limitedjurisdiction to interfere with findings of fact recorded by theTribunal. If findings of Tribunal are irrational, perverse or unreasonable, then only interference of court would bejustified. It would also be justified if a finding of fact isarrived at by the Tribunal without any evidence. Section260A is akin to Section 100 of the CPC, 1908.[See : Sampath Iyengar's Law of Income Tax].” (emphasis supplied) 23.In the judgment of Goodyear India Ltd.(supra), this court has held as under: 8. …… There is no scope for interference by the High Court on a finding recorded when such finding could be treated to be a finding of fact. A finding of fact must, therefore, be held to have become final. 24.The ITAT in the impugned order has given the separate finding on all the issues for all the three assessment years i.e. 2007-08, 2008-09 and 2009-10. The findings of the ITAT for the assessments years have been discussed hereinbelow for the proper understanding of the facts. ASSESSMENT YEAR 2007-2008 25.In the assessment year 2007-08, besides appeal having been filed by the department, the assessee had also filed the cross objections. The delay in filing of the cross-objections were condoned by the ITAT. The ITAT inter alia held that the base figure for computing the ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 13 of 27 assessable income will start from the loss of Rs.1,34,03,902/- and the cross objections filed by the assessee on this ground was allowed. 26.In the Assessment year 2007-08, the additions were made by the AO under the following heads: (i)Brokerage and Commission (ii)Share application money of Rs.17,60,000/- (iii)Addition on account of interest of Rs.7,48,856/- (iv)Disallowance under Section 14A (v)Disallowance of interest (vi)Deemed dividend (vii)Addition of Rs.10,20,212/- on account of expenses for which bills/vouchers were not furnished bills/vouchers were not furnished (i)Brokerage and Commission In respect of brokerage and commission the tribunal after discussing the entire findings given by the assessing officer and CIT(A) inter alia has held as under: In respect of brokerage and commission the tribunal after discussing the entire findings given by the assessing officer and CIT(A) inter alia has held as under: (i)Brokerage and Commission (ii)Share application money of Rs.17,60,000/- (iii)Addition on account of interest of Rs.7,48,856/- (iv)Disallowance under Section 14A (v)Disallowance of interest (vi)Deemed dividend (vii)Addition of Rs.10,20,212/- on account of expenses for which bills/vouchers were not furnished bills/vouchers were not furnished (i)Brokerage and Commission In respect of brokerage and commission the tribunal after discussing the entire findings given by the assessing officer and CIT(A) inter alia has held as under: In respect of brokerage and commission the tribunal after discussing the entire findings given by the assessing officer and CIT(A) inter alia has held as under: “12. After hearing both the parties and on perusal of the relevant finding given in the impugned orders, we find before the AO assessee categorically stated that the brokerage and commission paid were for two kind of activities, firstly, one paid for booking of units/ space and therefore, it was incurred during the course of carrying out activity of construction and sale of spaces in the mall. The second was with regard to leasing out the available space on lease rent for which again brokerage and commission has been paid. AO has erroneously treated the brokerage and commission paid under both heads as claimed towards income from house property, which on the facts has been found to be incorrect. It has already been demonstrated before the Ld.CIT(A), as incorporated above, that out of total claim of Rs.82,83,587/-, the amount of Rs. 61,39,630/- was paid on account of sale of unit/ property and ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 14 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 hence the finding of the Ld. CIT( A) and the direction to the AO to delete the disallowance of brokerage & commission to the extent of sale of unit properties is affirmed. In so far as the brokerage paid for amount of Rs. 21,43,957 /- which was claimed towards leasing of the properties, the same cannot be allowed, because the income from the house property has to be computed strictly in accordance with the items provided in section 24.Accordingly, the order of the Ld. CIT (A) is upheld and revenue's ground No. 1 is dismissed and cross objection No. 3 as raised by the assessee is also dismissed.” (ii)Share application money of Rs.17,60,000/- The tribunal after discussing the finding of the assessing officer and the CIT (A) inter alia held as under: “14. After hearing both the parties and on perusal of the relevant material placed on record, we find that it is an undisputed fact that the amount of Rs.17,65,000/- is not a fresh credit appearing in the books of accounts of the assessee. In fact, this amount of share application money was received by M/ s Heaven Barter Ltd from M/s. Novaflex Cable Care System Ltd. in the earlier years i.e., during the financial year 2004-05 and 2005-06. Thus, the credit was appearing in the books of accounts of another entity, M/s. Heaven Barter Ltd. in the earlier year which got merged with the assessee company during the year under consideration. It was due to this merger the old credit had come into the books of assesse which cannot be reckoned credit appearing in the books of accounts for the relevant financial year and therefore, the deeming fiction of section 68 cannot be attracted. Accordingly, on this score, the order of the Ld. CIT (A) is affirmed and consequently revenue's ground No.2 is dismissed.” (iii)Addition on account of interest of Rs.7,48,856/- The tribunal discussed the findings of the Assessing officer and the CIT (A) thread bear and inter alia held as under: “16. After considering the relevant submissions and on perusal of the relevant finding given in the impugned orders as well as seized ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 15 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 (iii)Addition on account of interest of Rs.7,48,856/- The tribunal discussed the findings of the Assessing officer and the CIT (A) thread bear and inter alia held as under: “16. After considering the relevant submissions and on perusal of the relevant finding given in the impugned orders as well as seized ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 15 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 material referred to before us at the time of hearing, we find that there is rough noting of calculation of interest on account of delayed payment by the purchaser which assessee has calculated to be @ 24%. Nowhere, as held by the Ld. CIT(A), it has been found or there is even mention in any seized document that interest rate so calculated has been realised from the said party. The AO has made the addition on the ground that, section 132(4A) raises the presumption against the assessee if something has been found from the possession of the assessee during the course of search. However, first of all such a presumption ujs 132(4A) is a rebuttal presumption and it is applicable only in the cases where assessee tries to give explanation contrary to the evidence found during the course of search. Here in this case, assessee is not denying the possession of the seized material found, albeit has been pointed out that the seized material does not indicate any undisclosed income. It was only prepared to pressurize the buyers to make the due payment in time. In any case, if the booking itself was cancelled in subsequent year, then the whole accrual of interest itself gets vitiated and the income which has not been received by the assessee cannot be taxed, because, only such income can be taxed when the other party also acknowledges the payment to be made or debt towards the assessee. Thus, under these facts and circumstances Ld. CIT (A) has rightly deleted the said addition. Accordingly, the ground No. 3 raised by the revenue is dismissed. (iv)Disallowance under Section 14A The tribunal minutely examined the entire facts as well as considered the judgment of Supreme court in case of CIT vs. Essar Teleholdings Ltd., (2018) 401 ITR 445 and inter alia held as under: 19. We have heard the rival submissions and also perused the relevant finding given in the impugned orders. In so far as first contention of the Ld. Counsel is concerned, that rule 8D is not applicable for the assessment year 2007-08, same now stands covered by the judgment of Hon'ble Supreme Court in the case of CIT vs. Essar Teleholdings Ltd. (supra) wherein it has been ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 16 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 settled that disallowance u/s14A cannot be computed under Rule 8D, prior to A.Y. 2008-09. Accordingly, the computation of disallowance under the Rule 8D for the A.Y. 2007-08 has to be rejected. Even otherwise also,in this year huge disallowance has been made on account of interest expenditure, which here in this case is an admitted fact that assesse company, as on 31st March 2007, had a huge surplus fund of more than Rs. 96.56 crores, as brought out by the Ld. CIT(A), which is sufficient to cover investment of Rs. 8.88 crores and accordingly, in view of settled principle laid down in various judgements, like CIT vs. Hero Cycles, [2010] 323 ITR 158 (P&H); CIT vs. HDFC Bank Ltd. [2104 366 ITR 505 (Bom) & (2016 383 ITR 589 (Bom,), no disallowance can be made. NEUTRAL CITATION NO: 2022/DHC/002050 settled that disallowance u/s14A cannot be computed under Rule 8D, prior to A.Y. 2008-09. Accordingly, the computation of disallowance under the Rule 8D for the A.Y. 2007-08 has to be rejected. Even otherwise also,in this year huge disallowance has been made on account of interest expenditure, which here in this case is an admitted fact that assesse company, as on 31st March 2007, had a huge surplus fund of more than Rs. 96.56 crores, as brought out by the Ld. CIT(A), which is sufficient to cover investment of Rs. 8.88 crores and accordingly, in view of settled principle laid down in various judgements, like CIT vs. Hero Cycles, [2010] 323 ITR 158 (P&H); CIT vs. HDFC Bank Ltd. [2104 366 ITR 505 (Bom) & (2016 383 ITR 589 (Bom,), no disallowance can be made. 19.1 In so far as what should be the reasonable basis for disallowance prior to the applicability of rule 80, we find that assessee has earned dividend income of Rs. 82,41,6101-, which are mostly from mutual funds. For deployment of funds and monitoring of such investments, it would be reasonable to estimate expenditure of Rs.1,00,000 on account of salary of the concerned persons looking after the mutual funds. Accordingly, the disallowance u/s 14A is restricted to Rs. 1 lac and consequently, the revenue's appeal is dismissed and assessee's cross objection No. 4 is partly allowed. (v)Disallowance of interest The tribunal while discussing this issue also minutely examined the entire facts and law and inter alia has held as under: “23. After hearing both the parties, we find that the finding of the Ld. CIT(A) is borne out from the records that most of the interest free advances appearing in the books of the assessee company were on coming from the accounts of the merging companies who were not having interest burden. It was not an amount given by the assessee, albeit they have inherited the advances on account of merger of the companies with the assessee company. Therefore, there could not be allegation of giving any advance from assessee's interest bearing fund. In another set of parties as evident from the above chart, the funds ITA 930/2019, ITA 936/2019, ITA 952/2019 Page 17 of 27 NEUTRAL CITATION NO: 2022/DHC/002050 were mobilised/advances to the contractors for the purpose of construction business, which ostensibly was for the purpose of business, which got adjusted in the subsequent year. Further, one advance was given as investment in the business firm, wherein assessee was a partner. Thus, none of these advances can be held to interest free advances for non-business purpose or given out of interest-bearing funds. Hence, under these facts it cannot be held that any interest-bearing loan amount raised from the bank account has been diverted to make any interest free advances and therefore, there is no question of making any notional disallowance of interest. Accordingly, order of Ld. CIT (A) is upheld and the ground of the revenue is dismissed.” (vi)Deemed dividend On the issue of deemed dividend under Section 2 (22) (e) the tribunal discussed in detail the findings of the assessing officer CIT (A) as well as considered the judgment of this Court in CIT vs. Ankitech (P) Ltd. vs. Ors., (2012) 240 ITR 14 (Del) inter aliaheld as under: (vi)Deemed dividend On the issue of deemed dividend under Section 2 (22) (e) the tribunal discussed in detail the findings of the assessing officer CIT (A) as well as considered the judgment of this Court in CIT vs. Ankitech (P) Ltd. vs. Ors., (2012) 240 ITR 14 (Del) inter aliaheld as under: “27. We have heard the rival submissions, perused the relevant finding given in the impugned order as well as material referred to before us at the time of hearing. From facts as noted by the AO in the impugned assessment order itself shows that M/s Appollo Traexim(P) Ltd. had made advances against booking of space to M/s Y.M.C.Buildmore Pvt. Ltd. amounting to Rs. 6,48,63,965/ -,which was purely a commercial transaction. As culled out from the record, M/s. Y.M.C .Buildmore Pvt. Ltd. was later on merged with the assessee company. Such an advance has come in the books of the assessee by way of merger. Such a payment for booking of space in the mall has been treated as deemed dividend by the AO u/s 2(22)(e), which cannot be in manner be reckoned as advance or loan in the nature of deemed di