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2018 (12) TMI 1565 - AT - Income TaxAddition on account of notional interest income on the loan given - Assessee’s alternate ground that interest may be levied @ 6.75% - Held that:- Fact remains that the impugned Loan Restructuring Agreement was not examined by the lower authorities and was rejected on a pre-conceived notion of it being a colourable device to avoid tax. We also note that the lower authorities have not considered and verified the assessee’s contention that the impugned loan was given out of reserves and interest free funds of the assessee company. It is also seen that the Ld. CIT (Appeals) has, without assigning any cogent reasoning, summarily dismissed the assessee’s alternate ground that interest may be levied @ 6.75%. Therefore we deem it appropriate to restore the issue to the office of the Assessing Officer to adjudicate the issue afresh in accordance with law after duly considering the contents of the original loan agreement as well as the loan restructuring agreement. The assessee will be at liberty to file evidences before the AO in support of its claim. The Assessing Officer shall also duly consider the alternate argument of the assessee that an interest rate of 6.75% may be applied - Appeal of the assessee stands partly allowed for statistical purposes.
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