TMI Blog1992 (8) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year under consideration, the assessee had an office at M-132,Connaught Place,New Delhi, as also an office atRajMahalPalace, Jaipur. (b) That the house at No. 77, Sundar Nagar, was already on rent jointly in the name of the assessee and Raj Mahal Palace Hotel at a rent of Rs. 5,000 per month since 27-1-1976. (c) That no deduction had been claimed in respect of the rent paid in the preceding assessment years. (d) That Shri Bhawarni Singh was the Chairman of the Board of Directors of the assessee-company as well as a partner in the firm, M/s. Raj Mahal Palace Hotel, and as per the terms of the lease-deed, the property was primarily meant for his residential purposes as also other family members. (e) That in the lease-deed executed on27-1-1976had expired on26-1-1979there was a clear stipulation that the property was to be used only for residential purposes and not for the purposes of maintaining an office or for any other commercial purpose. (f) That although there was no lease-deed operating in so far as the assessment year under appeal was concerned, the compromise decree obtained by the landlord from the Court of the Additional Rent Controller under section 23 of C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee, on the other hand, supported the order passed by the CIT(Appeals) reiterating thereafter the arguments advanced before the ITO as also before the CIT(A) in support of the claim. 7. We have examined the rival submissions and have also perused the material on record to which our attention was invited by the parties. We have already indicated in the earlier part of our order the undisputed facts of the case, which were not challenged by the assessee, either before the ITO, the IAC in 144B proceedings, the CIT(Appeals) and even before us. The situation now boils down to the uncontroverted fact that the property at 77, Sundar Nagar was meant for the use of " The Chairman of SMS Corp. P. Ltd. or any of its officer, servants and agents or for the partners of Raj Mahal Palace Hotel, Jaipur or for the officers of the said SMS Corp. P. Ltd. or Rajmahal Palace Hotel " (clause 9 of the lease-deed dated 27-1-1976). The same clause categorically states that, in case the premises are to be used for the purpose of running an office or any other commercial establishment, then the lessee, which, in this case, happens to be the assessee, jointly with M/s. Rajmahal Palace Hotel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross an amount of Rs. 35,510 pertaining to one Smt. Sashi Prabha Devi. On obtaining the detailed accounts from the debtor, the ITO found that she had taken certain loans in 1965 and again in 1978, the total amount outstanding on 30-11-1979 being Rs. 57,309. Out of the aforesaid. a sum of Rs. 15,800 was received and the balance of Rs. 35,509 was written off. The ITO took note of the fact that there was no agreement between the parties for writing off the amount and nor had any suit been filed for recovery. The debtor was summoned by the ITO, who proceeded to record her statement and also allowed the assessee's representative to cross-examine her. The aforesaid brought out the following facts : (a) That the debtor had served as a lady in waiting to Maharani Gayatri Devi, on a monthly salary of Rs. 300, but had left the service in 1953. (b) That she wanted some money for the marriage of her daughters for which she had made a request to Late Maharaja Sawai Man Singh and at whose direction, the amounts were handed over to her by Maharaja Jai Singh. (c) That, on the date of recording of the statement, she had a sum of Rs. 30,000 lying in her bank account and also had a deposit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination conducted by the assessee's representative, lead as to conclude that although the amount was advanced to the lady with the stipulation that interest would be charged, the debtor in turn was always under the impression that no such interest was to be paid and from time to time she did make the position explicit and quite clear. A specific reference in this connection may be made to the following questions and answers extracted from the Statement recorded by the ITO :-- "Q. Why you did not repay the total amount outstanding in your account ? A. I repaid the principal loan and did not repay amount of interest because I had told them in the beginning that I shall repay only the principal. Q. Were you to pay interest upon this advance ? A. No. Q. Did you receive any notice about repayment of interest ? A. Once or twice certain envelopes did come to me but I do not know what those letters contained since I had already told the Darbar that I shall not pay interest. Darbar mean late H. H. Man Singhji. When I took the advance in 1968-69 I told the Darbar late H. H. Man Singhji that I shall not pay interest. Q. Maharaj Jai Singh Ji advanced the loan as the Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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