TMI Blog2003 (1) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal relates to confirmation of an addition of Rs. 45,000 made by the Assessing Officer as "interest not charged on advance given to M/s. Krishna Traders for non-business purposes". 2. The ld. counsel appearing on behalf of the assessee drew our attention to a copy of letter dated 26-12-1985 sent by M/s. Krishna Traders to the appellant. In this letter it was mentioned by the debtor that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-91. The assessee did not charge any interest in assessment years 19985‑86 and 1986-87 (S.Ys. 2040 and 2041). The learned counsel submitted that it is not a case where the interest expenditure has been disallowed but addition has been made in respect of hypothetical interest income, which never accrued to the assessee nor was received by the assessee. He placed reliance on the judgments in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the said agreement indicated in debtor s letter dated 26-12-1985 was not acted upon by the assessee or by M/s. Krishna Traders. The interest income for the year under consideration did not accrue in favour of the assessee nor it was received. No tax can be levied on an income which in fact has not materialised. We are therefore of the view that the addition of Rs. 45,000 made in this regard de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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