Ajay Kumar Mittal, J.

1. This order shall dispose of ITA No. 219 of 2013 and 91 of 2017 as according to the learned counsel for the parties, the issue involved in both the appeals is identical. However, the facts are being extracted from ITA No.219 of 2013.

2. ITA No.219 of 2013 has been preferred by the appellant-revenue under section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 19.3.2013, Annexure A.3 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, “the Tribunal”) in ITA No.274/(Asr)/2012, for the assessment year 2008-09, claiming following substantial questions of law:-

“i. Whether on the facts of the case, the ITAT has erred in holding that no interest payment is disallowable under section 36(1)(iii) on interest free loan given to sister concern ignoring the facts that the assessee has a mixed fund wherein both its internal generation and borrowed funds contribute and that the interest paid on working capital loan is directly proportional to the funds withdrawn out of it?

ii. Whether on the facts of the case, the ITAT has erred in holding that interest cannot be attributed under section 14A in case of posi