JUDGMENT D.K. Jain, J.
1. This appeal by the Revenue under Section 260A of the Income-tax Act, 1961 (for short "the Act"), is directed against the order, dated October 12, 2001, passed by the Income-tax Appellate Tribunal, Delhi Bench "B", New Delhi (for short "the Tribunal"), in I. T. A. No. 5425/Delhi of 1995.
2. Briefly stated, the material facts are :
During the course of assessment proceedings pertaining to the assessment year 1984-85, the Assessing Officer noticed that the assessed had claimed as expenditure the amount of interest of Rs. 10,25,953 paid to one Jolly Bawa and Associates on the loans raised from them. He was of the view that since under an agreement, dated October 1, 1981, between the assessed and Jolly Bawa and Associates, the latter was to arrange the necessary funds for construction of cinema and for other business activities, the assessed was not required to pay any interest, and, therefore, the said payment towards interest could not be allowed as business expenditure. Rejecting the stand of the assessed that the said agreement had been varied subsequently, the Assessing Officer disallowed the said expenditure. It appears that against the disallowance the matter was taken up in further appeals and vide order dated March 17, 1992, the Income-tax Appellate Tribunal (in I. T. As. Nos. 594/Delhi of 1989 and 1438/Delhi of 1989) set aside the said disallowance and remanded the case back to the Assessing Officer to reconsider the issue in the light of certain directions contained in the said order. On reconsideration, the Assessing Officer took the same view, which had been taken earlier.
3. Aggrieved, the assessed preferred appeal to the Commissioner of Income-tax (Appeals), who vide his order dated March 29, 1995, deleted the said disallowance. The Commissioner was of the view that the agreement dated August 1, 1981, was not a sacrosanct document beyond the amendment by the parties to the agreement; the parties were free to change any terms of the agreement by mutual consent and the observation of the Assessing Officer that no amendment to the agreement could be carried out without taking the matter to arbitration was without any foundation. Taking into consideration the correspondence exchanged between the parties, he came to the conclusion that there was nothing illegal or irregular in the payment of interest by the assessed to Jolly Bawa and Associates.
4. The Revenue took the matter in further appeal to the Tribunal. The Tribunal after noticing the movement of the loan amount inter se between the assessed, Jolly Bawa and Associates and one Laxmi Chand Bhagyaji, has upheld the view taken by the Commissioner (Appeals). The Tribunal has noted that there is no dispute between the parties that certain changes were made in the aforenoted agreement by mutual consent. Hence, the present appeal.
5. It is submitted by Mr. Pandey, learned senior standing counsel for the Revenue, that once the parties arrive at a particular arrangement which is reduced to writing, the parties are bound by the terms agreed to. It is urged that since the Tribunal has ignored a vital term of the agreement to the effect that the agreement shall not be varied till July 31, 1984, its order is perverse, giving rise to a substantial question of law.
6. We do not agree. We find that both the Commissioner of Income-tax (Appeals) and the Tribunal have noticed that by mutual consent, the parties had carried out certain changes in the original agreement and the interest was paid by the assessed in terms of the changed terms. The Assessing Officer had not doubted the genuineness of the subsequent arrangement but had rejected the assessed's claim only on the short ground that in view of the aforenoted restriction against change in terms, the original agreement could not be ignored. The Tribunal has come to the conclusion that there was no element of collusiveness in the parties agreeing to vary the terms of the initial agreement. We are of the view that this conclusion is essentially factual. The issue raised by the Revenue cannot be said to involve any question of law, much less a substantial question of law. It cannot be said that the finding of the Tribunal is without any evidence or material or is perverse. It cannot also be held that no person acting judicially and properly instructed as to the relevant law could have come to the same conclusion as the Tribunal has come to. The Act does not contain provisions governing rights between the parties.
7. The appeal is, accordingly, dismissed.