TMI Blog2015 (5) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax are as under:- 5.1 I have carefully considered the petition u/s 264, submissions of the assessee, comments of the Assessing Officer and assessment records of the assessee. In his petition reproduced ante, in clause (ii) and (iv) the appellant has raised objections on the addition of ₹ 19,32,000/-, on account of notional income on advances. In clause (i), (iii), (v), (vi), (vii) and (viii) the assessee has raised general legal objections I observations which are not required to be separately addressed and will be considered while discussing factual issues. 5.2 The only issue involved is on the addition of ₹ 19,32,0001- on account of interest @ 2% on advances of ₹ 1,61 ,00,0001 given to M/s Smart Tourist Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention is that since the assessment in 2009-10 on this issue is based on order for earlier assessment of A.Y. 2008-09, this assessment should also be set aside u/s 264 as the earlier assessments were set aside u/s 264. In this connection, I have carefully perused the order u/s 264 dated 16.03.2012 of my Ld. Predecessor. The assessment of A.Y. 2008 ')9 was set aside by the then Ld. CIT. In the tabular chart given in the order u/s 264 dated 16.03.2012, it is seen that 4 issues were identified. Interest on advance for purchase of land was only one of the issues. Even on this issue, the Ld. CIT has noted the comments of the incumbent A.D. stating that the action of the A.D. in making the said addition cannot be said to be unreasonable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside by my Ld. Predecessor after considering many issues, and the impugned issue was only one of the issue. Even on this issue, my Ld. Predecessor had noted the comments of the Assessing Officer about correctness of the addition and has not given any specific finding. On perusal of the records of A.Y 2008-09, I notice that the assessee has again failed to furnish documents like agreement to sell and valid confirmations in support of its contentions. Even during proceedings u/s 264, the assessee has not furnished these vital details. On objective consideration of the facts and circumstances of this case, I am of the opinion that the Assessing Officer was justified in making this addition and therefore, I refuse to interfere in the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no finding in the assessment orders or in the order of the Commissioner of Income Tax that the petitioners had, in fact, received some amount by way of interest and that such amount was not shown in the accounts. It is also contended that the revenue authorities have not rejected the books of accounts of the petitioner. It was, therefore, submitted that unless and until there was a concrete finding that something was received by the petitioner from the said Smart Tourist Private Limited and other persons similarly situated, nothing can be added by way of notional income. A reference was made to the decision of the Guwahati High Court in B and A Plantations and Industries Ltd. v Commissioner of Income -Tax: 242 ITR 22. The relevant po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the view of the Income Tax Officer, which has been accepted by the Tribunal, was that the assessee, as a good business concern, should not have granted interest-free loan, or should have insisted on payment of interest. If the assessee had not bargained for interest, or had not collected interest, we fail to see how the Income Tax authorities can fix a notional interest as due, or collected by the assessee. Our attention has 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 this view, we answer question No. (ii) in the negative, that is, in favour of the assessee and against the Revenue. 5. On going through the said d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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