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TMI Blog2024 (4) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit and loss account as per the requirements of Indian Accounting Standard. 2. The facts relating to the above said issue are stated in brief. The assessee is a public limited company engaged in the business of storage and handling of liquid cargo. During the year under consideration, the assessee had given interest free loan to its wholly owned subsidiary named 'Kesar Multimodal Logistic Limited'. Though no interest was due on that loan as per the agreed terms, yet, as per the requirement of Indian Accounting Standard, the assessee accounted for "notional interest" in the books of account and credited the same in its Profit and Loss account. The notional interest income so credited was Rs. 2,76,81,947/-. Since it was only a book en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 143(1)(a) of the Act, since he had already granted relief against the very same addition in the appeal filed against the rectification order passed u/s 154 of the Act. It is also pertinent to note that the assessee has not challenged the order so passed by the learned CIT(A) against the intimation issued u/s 143(1)(a) of the Act. 7. We heard the parties and perused the record. The only issue that arises for adjudication now is related to taxability of notional interest income credited by the assessee in his profit and loss account as per the requirement of Indian Accounting Standards. The contention of the assessee is that the income tax can be levied only on the real income and not on notional income. It is submitted that the notion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l bank of India and Andhra bank, in terms of IND-AS standards which mandate disclosure of necessary income which effects the financial position of the appellant company. But fact remains that, as per terms of agreement between the appellant company and bankers, there is a restrictive covenant for not charging any kind of monetary benefits including commission. Therefore, although for the purpose of books the assessee recognized notional income from guarantee commission, but because it has not received any consideration for providing guarantee, the same has been reduced from the total income in the computation of income. In our considered view, when there is a contractual obligation for not charging any commission, merely for the reason that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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