TaxTMI 
TaxTMI 
2011 (3) TMI 25
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.... a finding that the assessee had no business connection with the alleged borrower in giving a loan by relying upon the alleged admission of the representatives of the assessee before the Tribunal. 2. Being dissatisfied, the assessed has come up with the present appeal. The facts giving rise to filing of this appeal may be summed up thus: (a) The assessee is a partnership firm deriving income from house property and profit and gain from business. During the course of assessment proceeding, the Assessing Officer observed that the assessee had obtained unsecured loan of Rs.2,39,87,889/- for which interest of Rs.20,92,832/- was paid and out of the said unsecured loan, the assessee advanced a sum of Rs.1,09,94,298/- by way of unsecured ....
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....payable on 31st March each year and accordingly the interest had been charged. The assessee pointed out before the Commissioner of Income-tax (Appeal) that it had entered into the said agreement dated 28th February, 1997 and agreed not to charge any interest to M/s. Hamlet with effect from 1st April, 1996. Since the interest accrued to the assessee only at the last date of accounting year, no interest accrued to the assessee on 31st March, 1997 and consequently, there was no question of any income by way of interest accrued to the assessee on that date or during the financial year 1996-97. (d) The assessee submitted that the variation in charging the interest was made by virtue of the agreement dated 28th February, 1997 purely on commerc....
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....or business consideration because of the fact that there was no business connection between the assessee and the borrower, the assessee was not entitled to any deduction on the aforesaid amount although the Tribunal agreed with the representative of the assessee that the assessee entered into an agreement dated 28th February, 1997 before the interest became due. The Tribunal also agreed with the Commissioner of Income-tax (Appeal) that in view of the decision of the Supreme Court in the case of Shiv Prakash Janakraj (Supra), when the waiver takes place before expiry of the accounting year in which the interest becomes payable, such interest could not be burdened with tax liability and that such decision squarely applied to the case in fa....
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....ity of interest paid by the appellant on the moneys borrowed by it when the question before its was as to whether any deemed interest accrued to the appellant in respect of the loan advanced to the firm M/s. The Hamlet and its purported findings directing disallowance of interest paid are beyond the scope of the appeal filed by the Revenue?" ("ii) In the event the answer to question No.1 is in the negative, whether the purported findings of the Tribunal that there was no business connection between the appellant and the said firm or that any such admission was made by the appellant's authorized representative or that the loan given to the said firm was not on business consideration or that borrowed money to the extent of Rs.1,09,94,298/-....
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....y the Tribunal. 4. Mr. Nizamuddin, the learned counsel appearing on behalf of the Revenue, has on the other hand, supported the reasons assigned by the Tribunal below and has contended that a concession made by a representative is binding on the assessee and thus, the Tribunal did not commit any illegality. 5. After hearing the learned counsel for the parties and after going through the materials on record, we are quite conscious of the position of law that although a concession by a counsel on behalf of his client on a question of law is not binding but a concession made on a question of fact is binding on his client. The law is equally settled that if a Tribunal records a wrong finding that there was a concession on an issue of fact....
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.... the aforesaid fact, we are of the view that within the scope of appeal before the Tribunal preferred by the Revenue, the question was whether the CIT (Appeals) was justified in passing the order impugned on the basis of materials on record and there was no question of deciding the appeal on the basis of any admission when at no point of time in the past there was any admission of the assessee that there was no business connection between the assessee and M/s. Hamlet and such alleged admission was also not put forward as one of the grounds by the Revenue in appeal before the Tribunal; on the other hand, the CIT(Appeals) accepted the written agreement between the assessee and M/s. Hamlet showing exemption of interest by the assessee on pure ....