TMI Blog2014 (10) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... eted by the Tribunal – thus, the addition of notional interest income made in the case of the assessee for both the years deserves to be deleted – Decided against revenue. - Tax Appeal No. 11 of 2012, Tax Appeal No. 14 of 2002 - - - Dated:- 13-10-2014 - K. S. Jhaveri And K. J. Thaker,JJ. For the Petitioner : Mrs Mauna M Bhatt, Adv. For the Respondent : Mr R K Patel, Adv. JUDGMENT (Per : Honourable Mr. Justice KS Jhaveri) 1. Both these Tax Appeals have been preferred by the appellant-Revenue against the order passed by the Income Tax Appellate Tribunal, Ahmedabad in the two appeals preferred by the assessee which was disposed of by the common judgment in ITA No. 4783/Ahd/1995 for the A.Y. 1991-92 and ITA No. 4784/Ah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars of income and thereby assessee has not disclosed the income from interest on accrual basis. The assessee has advanced to two parties viz. Shri Bahel Co. (P) Ltd. and Budh Holding Trading Co. (P) Ltd. The assessee has not credited correct amount of interest accrued last year also. In view of above, it is clear that the assessee has not disclosed the income from interest at ₹ 4,78,093/- being interest accrued from the above parties. The same is, therefore, added to the income of the assessee as concealed and notice under sec. 271(1)(c) of the Act is also issued. 3. The facts of Tax Appeal No. 14 of 2002 are that the return of income is filed on 9.9.1992 declaring total income of ₹ 2,50,500/- which was processed on 23. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the year and not otherwise. However, the assessee has not shown total interest receivable from the principal amount as discussed above. The advance given by the assessee are not sticky advances and re not likely to be bad debts but recoverable. The assessee ought to have credited interest account and debited parties account. This is not done and therefore, the assessee has concealed income from interest. 4. Against the said assessment order, the assessee has preferred appeal before the Commission of Income Tax (Appeals), which was dismissed, against which, an appeal has been preferred before the Income Tax Appellate Tribunal, Ahmedabad Bench, which came to be allowed. Hence, both these appeals are preferred by the appellant-Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tters filed by the debtor companies, it is seen that they have deducted tax at source also and only net interest had been added to the credit balance in their books. The interest, according to the confirmation letters, has been charged only on the principal amount of loans, for 3 years starting from 1989 to 1991. The copies of accounts of these companies as appearing in the books show that the interest has been charged on outstanding interest also. There appears to be some inter-connection between the debtor companies and the assessee which again has not been disclosed. This part, the amounts of interest charged also varies between debtor companies books and assessee s books as shown below: 1. Shri Budh holding Trading Co. Pvt. Ltd. (Loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-Tax, reported in 210 ITR 129. 8. Mr. R.K. Patel learned advocate appearing on behalf of assessee has contended that in view of the observations made by the learned Tribunal in para-5 and 6 at page 42 and 46 and in view of the decision of the Hon ble Supreme Court in the case of Godhra Electricity Co. Ltd. v. Commissioner of Income-Tax, reported in 225 ITR 746 the issue involved in these appeals is squarely covered in favour of assessee. He has also pointed out that in view of consent given by D.R. dated 16.12.1991 and the observations made by this Court in the case of Commissioner of Income-Tax vs. Shahibaug Enterprises (P) Ltd., reported in [2010] 320 ITR 695 (Guj.) in para-5, which reads as under: 5. Heard the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. 9. The facts on which the learned Tribunal has allowed the appeal, more particularly, para-6 7, reads as follows: 6. The learned DR did not dispute the correctness of the facts stated by the learned counsel nor he disputed the claim made by the assessee that the facts of the present case are identical with the facts in the case of Shri Apara Textile Traders P. Ltd. (supra) where the Tribunal has deleted similar addition of notion income. 7. I have considered the submissions made by the learned representatives of the parties and have gone through the orders of the learned Departmental Authorities and all other documents submitted in the compilation including the copy of submissions made before the CIT(A), Board Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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