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2014 (6) TMI 257 - AT - Income TaxAccrual of interest - uncertainty - Addition of notional interest and brokerage - Held that:- The addition on account on account of notional interest was not justified as the assessee had not earned any income as M/s DEIL had already expressed its inability to pay the interest - the assessee was following mercantile system of accounting and under normal circumstances it had to provide for interest income receivable from M/s DEIL but since the assessee was aware of the fact that it will not receive any income as interest, thus, following conservative policy of not taking into account any income which is uncertain did not make any provision for interest income and CIT(A) had rightly appreciated the facts - assessee had about Rs.12.77 crores of share capital and reserve at the close of the AY 2002-03 whereas the loan to Unitech Ltd. is only to the extent of Rs.8.05 crores - CIT(A) has rightly appreciated about surplus funds available with the assessee and has rightly deleted the addition - Regarding the addition of brokerage there was no force in the argument of revenue and CIT(A) has rightly appreciated the facts and allowed the relief – Decided against Revenue.
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