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2015 (5) TMI 192 - HC - Income TaxAddition on account of interest @ 2% on advances - Held that:- there was nothing to show that the assessee had, in fact, received interest or that the company to whom the loan was given had, in fact, paid interest to the assessee. There was also nothing on record to show that the alleged interest was not reflected in the accounts. The only finding recorded was that the assessee “ought to” have charged interest. Referring to an earlier decision of the Guwahati High Court, in Highways Construction Co. Private Limited v. CIT: [1992 (11) TMI 86 - GAUHATI High Court] the Court observed that their attention had not been invited to any provision of the Income-Tax Act empowering the income-tax authorities to include in the income, interest which was not due or not collected. In similar vein, when asked Mr Sahni, appearing for the respondent to point out some provision of the Income Tax Act, whereunder such "notional‟ interest could be made the subject matter of tax, the only reference he made was to Section 144 of the said Act. However, we are clear that Section 144 does not at all apply to the present proceedings because the present proceedings originate from an assessment under Section 143(3) of the said Act. The addition on account of a notional income on advances is deleted. - Decided in favour of assessee.
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