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| The Tax Publishers2020 TaxPub(DT) 2115 (Del-Trib) INCOME TAX ACT, 1961
Section 69B
AO was precluded from proceeding to bring to tax notional income on loan advanced to sister concern without there being any machinery provisions because notional income on advances could not be brought to tax in absence of any specific provision of the Act.
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Income from undisclosed sources - Addition under section 69B - Notional interest under section 69B on loan advanced to sister concern -
Revenue was aggrieved by order of CIT(A) deleting addition made on account of notional interest under section 69B on loan advanced to sister concern. It was so held that once genuineness was proved and interest was paid on borrowings, AO could not disallow the deduction either on the ground that the rate of interest was unreasonably higher or that assessee himself charged a lower rate of interest. Held: It was not the case of AO that loan advanced to sister concern was not recorded in the books of account. It was not also case of AO that interest expenditure claimed as deduction by assessee should have been disallowed under the provision of section 36(1)(iii). Fact remained that AO proceeded to bring to tax notional income without there being any machinery provisions in the Act. Notional income on advances could not be brought to tax in absence of any specific provision of the Act.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
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