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2017 (1) TMI 678 - ITAT MUMBAI

2017 (1) TMI 678 - ITAT MUMBAI - TMI - Addition under the head notional interest - Held that:- We find that the assessee had advanced loan from its interest free funds and had not charged any interest, that the AO had taxed notional interest in the hands of the assessee without bringing any evidence of charging of interest by the assessee. He has also not explained as to how the interest income accrued to the assessee. In the normal course of its business transaction the assessee had advanced lo .....

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e Rules is to deprive the assessee of double benefit i. e. claiming deduction against tax free income. In the case under consideration the FAA has restricted the disallowance to the extent it was claimed against the exempt income. In our opinion there is no need to interfere with his order. So, confirming the same second ground is decided against the AO. - I. T. A. 185/Mum/2015 - Dated:- 6-1-2017 - Sh. Rajendra, Accountant Member And C. N. Prasad, Judicial Member Revenue by : Shri P. R. Ghosh-DR .....

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u/s 147 of I. T. Act and reassessment was completed u/s 143(3) r. w. s. 147 of the Act on 28/03/2013 , determining its total income at ₹ 4, 26, 49, 193/-. 2. First ground of appeal is about deleting the addition made by the AO under the head notional interest, amounting to ₹ 7. 48 crores. In this case the AO received, information from the office of the DGIT(Inv. )that the central agencies, investigating the cases pertaining to 2G allocation, have suggested that the financial transact .....

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tion UASL License. From the perusal of the records and information received u/s. 133(3) of the Act, the AO held that the source of the fund of ₹ 175 crores had come from Essar Investment Ltd. on 10. 01. 2008, that the money was refunded on the same to Essar Investment Ltd. , after the assessee had received the refund, that the real intention of the assessee was not share subscription in LTL but to advance the funds as loan to enable the latter to mobilize resources for acquisition of USAL .....

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hat as per the provisions of Act only the income accrued or received could be taxed, that an assessee could not be compelled to earn a particular income in a particular way, that in the business advancing interest free loans was a common practice, that if someone was advancing interest free loan out of its own funds or out of non interest bearing borrowed funds to anybody, the AO cannot tax notional income of interest unless there was any proof of underhand payments of interest by the said perso .....

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We have heard the rival submissions and perused the material before us. We find that the assessee had advanced loan from its interest free funds and had not charged any interest, that the AO had taxed notional interest in the hands of the assessee without bringing any evidence of charging of interest by the assessee. He has also not explained as to how the interest income accrued to the assessee. In the normal course of its business transaction the assessee had advanced loan and had not charged .....

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