Swatanter Kumar, J.

The appellant/assessee questions the correctness of the order passed by the Tribunal, Delhi Bench, in ITA No. 1908/Del/2000 for the asst. yr. 1996-97, dt. 12th Feb., 2004, vide which the appeal preferred by the Revenue was accepted and the order of the CIT (A) was set aside in this appeal under s. 260A of the (hereinafter referred to as the). The facts giving rise to the present appeal are that the assessee had filed his return for the asst. yr. 1996-97. The AO by a detailed order dt. 17th Feb., 1999, assessed the total income at Rs.1,37,89,107. This order of the AO was challenged in appeal by the assessee before the CIT (A), New Delhi. Vide his order dt. 14th Jan., 2000, he dealt with various grounds raised by the assessee and the claim raised under ground No. 3 relating to interest of Rs.2,61,193 charged from M/s Toolman Engineers, wherein the assessee had advanced an amount of Rs.34,42,850 as interest-free loan to the said concern.

2. The order of the CIT (A) was taken up in appeal by the Revenue, as already noticed, and while accepting the said appeal the Tribunal held as under:

"Being not satisfied with the order of the AO, the assessee filed an appeal before the CIT (A) and the arguments raised before the AO were reiterated before the CIT (A) which found favour with him and he disallowed the addition so made by the AO with the following observations :

I have considered the submission of the Authorised Representative as well as the reasons given by the AO in the assessment order for disallowing the claim. But the AO has not been able to establish a direct nexus between the interest-bearing loan taken and the interest free advance given to the sister-concern. The action of the AO is not justified. Hence, the disallowance made is deleted. Thus, ground No. 3 is allowed.

The Revenue has a grievance to the said order of the CIT (A) and is in appeal before us.

At the time of hearing of the appeal learned Departmental Representative contended that the assessee had diverted the interest-bearing funds to its sister-concern on which no interest was charged. According to the learned Departmental Representative, on the one hand the assessee was raising finances from the market and on the other hand the same fund was being diverted. The learned Departmental Representative contended that there was no element of commercial expediency and, therefore, the CIT (A) fell in error in deleting the additions made by the AO to the extent of proportionate interest.

To the arguments raised by the learned Departmental Representative, learned Authorised Representative contended that there was an element of commercial expediency, which led the assessee to divert its funds. According to the assessee, the funds were diverted as space in the building was required on rent for establishing business.

We have heard the parties and taken ourselves through the record and find that the plea of commercial expediency is out of place for the reason that premises were never taken by M/s Toolman Engineers. That apart, it is not in dispute that the assessee had raised funds from the market. Not only this, there was an increase in the unsecured loans to the extent of approximately 34 lakhs. In this view of the matter, we find that the CIT(A) was not justified in deleting the addition made by the AO on account of interest.

Consequent to the above, the appeal filed by the Revenue succeeds and is hereby allowed.

Sd/- Sd/-

(Keshaw Prasad) (Y.K. Kapur)

Accountant Member Judicial Member

3. As is evident from the above recorded findings that the Tribunal considered in entirety all the circumstances on the record and noticed that a concern which itself was taking loans from the market in the same financial year had given loan to the extent of Rs. 34 lakhs to its sister-concern free of interest. This conduct was not justified. Consequently, it directed that the deletion by the CIT(A) of the addition made by the AO was not justifiable in law.

4. The assessee had placed on record the fund-flow statement for the year 1995-96, which itself shows that the concern had taken unsecured loans, which was considered as one of the main sources of funds and still had opted to give loan to M/s Toolman Engineers to the extent of Rs.34,42,850 to its sister-concern. Whether there existed any commercial expediency for the assessee to transfer the said amount to one of its sister-concerns or not, is primarily a question of fact. The contention that the funds were advanced from self-generated funds of the assessee and that there was a need for that purpose, is again a question of fact. It is a settled principle of law that the Tribunal is the final fact-finding authority and the Courts while exercising the appellate jurisdiction under s. 260A of the would not normally interfere with such findings. The assessee has framed as many as five questions of law, which according to the assessee fall for consideration of the Court in the present appeal. The bare reading of all these questions itself shows that they are purely questions of fact, much less a pure questions of law. In CIT vs. Tin Box Co. 2003 (182) CTR 171: 2003 (260) ITR 637 (Del) [LQ/DelHC/2002/2162] 2004 (135) TAXMAN 145 [LQ/DelHC/2002/2162] , 176 TAXATION 70, this Court held as under:

"Additionally, the Tribunal has also noted that the Departmental Representative could not point out any specific interest-bearing borrowed funds, which had been diverted by the assessee to its sister-concern.

The aforenoted findings of the Tribunal being based on the relevant evidence on record, no question of law, much less a substantial question of law, arises from the orders of the Tribunal. It is not shown to us as to which finding of the Tribunal is either without any evidence or material or it is contrary to the evidence, to term it as perverse. Thus, there is no scope for interference by this Court on the affronted findings of fact recorded by the Tribunal."

5. In view of the above law, besides the fact that no question of law, much less a substantial question of law arises in the present case, the other predominant factors which would require dismissal of this appeal is that, from the records nexus can be traced between the borrowed funds and the interest-free advances made by the assessee and its sister-concern. Secondly, it has been clearly established on record that the assessee itself had taken loans with interest and had advanced funds by diversion or otherwise to its sister-concern free of interest. In these circumstances, we are of the considered view that the order of the Tribunal calls for no interference by this Court and in any case no substantial question of law arises for consideration in the present appeal.

6. The appeal is accordingly dismissed, while leaving the parties to bear their own costs.