( 1 ) THE Income-tax Appellate Tribunal, Delhi, has referred the following two questions of law under Section 256 (1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for the opinion to this court. "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the Commissioner of Income-tax (Appeals) order allowing interest accrued on excess levy sugar price of Rs. 9,82,343 ? ( 2 ) WHETHER, on the facts and circumstances of the case, the Tribunal was right in confirming the commissioner of Income-tax (Appeals) order deleting addition of Rs. 3. 60 lakhs as estimated interest on debit balance of Dhampur Yeast Co. Ltd. , which was, subsidiary of the assessee-company ?" 2. Briefly stated the facts giving rise to the present reference are as follows : the respondent is a public limited company engaged in the business of manufacture and sale of sugar by vacuum pan process. For the assessment year 1978-79, it had claimed a sum of Rs. 9,82,343 as interest on excess levy sugar price which was disallowed by the Income-tax Officer on the ground that it was a provision and not an ascertained liability and could be allowed only when the matter is finally decided by the court. The Commissioner of Income-tax (Appeals)deleted the addition following his earlier order for the assessment year 1979-80. The Tribunal has upheld the order of the Commissioner of Income-tax (Appeals) of this assessment year by following its earlier orders for the assessment years 1976-77 and 1977-78. ( 3 ) DURING the assessment year in question the Income-tax Officer has made an addition of Rs. 3. 60 lakhs as estimated interest at 15 per cent, on the debit balance of Rs. 24 lakhs. While taking into consideration the noting of the auditors report that Rs. 25,82,607 was due from Dhampur yeast Co. , Ltd. , which was a subsidiary of the respondent-assessee and that it had been charging interest from the said subsidiary in the previous years but no interest has been charged in the year in question, the Income-tax Officer had observed that the respondent was paying heavy interest on the loans obtained from banks, etc. , and, therefore, considering the opening debit balance in the Dhampur Yeast Co. Ltd. s, account the addition was made. , and, therefore, considering the opening debit balance in the Dhampur Yeast Co. Ltd. s, account the addition was made. The aforesaid addition was deleted by the Commissioner of Income-tax (Appeals) on the ground that the paid-up capital of the subsidiary was only Rs. 1 lakh while the losses suffered by the said subsidiary were to the tune of Rs. 12. 95 lakhs and, therefore, there was very little possibility of even realisation of the principal amount from the subsidiary. The Tribunal has upheld the order of the Commissioner of income-tax (Appeals) on this point also on the ground that the interest had not been charged as commercial expediency considering the weak financial position of the subsidiary. ( 4 ) WE have heard Sri A. N. Mahajan, learned standing counsel appearing for the Revenue, and sri R. R. Agarwal, learned counsel appearing for the respondent. ( 5 ) SO far as the question of deduction of interest on extra levy sugar price is concerned, we find that this court in Income-tax Reference No. 18 of 1983, (CIT v. Dhampur Sugar Mills Ltd. (No. 1) [2005] 274 ITR 340) decided on August 25, 2004, which relates to the assessment year 1974-75 had held that in respect of the liability for payment of interest chargeable under the levy Sugar Price Equalisation Fund Act, 1976, accrued only after April 1, 1976. In the present case the assessment year in question is 1978-79, therefore, liability had accrued and it cannot be said that it was only a mere provision of liability. ( 6 ) RESPECTFULLY following the aforesaid decision we are of the opinion that the Tribunal, was justified in upholding the deletion of Rs. 9,82,343 towards interest accrued on excess levy sugar price. So far as the question of deletion of Rs. 3. 60 lakhs is concerned we find that the commissioner of Income-tax (Appeals) as also the Tribunal had recorded a categorical finding that it was on account of commercial expediency and on account of continued losses suffered by the subsidiary that interest was not charged in this year. Even otherwise, if the company has not advanced loan out of the borrowings as has been found by the Tribunal the interest cannot be added as held by this court in Income-tax Appeal No. 27 of 2000 (CIT v. Radico Khaitan Ltd. [2005] 274 ITR 354) decided on September 14, 2004. Even otherwise, if the company has not advanced loan out of the borrowings as has been found by the Tribunal the interest cannot be added as held by this court in Income-tax Appeal No. 27 of 2000 (CIT v. Radico Khaitan Ltd. [2005] 274 ITR 354) decided on September 14, 2004. ( 7 ) IN this view of the matter, we answer both the questions of law referred to us, in the affirmative, i. e. , in favour of the assessee and against the Revenue. However, there shall be no order as to costs. . .