2020 (2) TMI 1684 - AT - Income Tax

Benefit/perquisite u/s.2(24(iv) - addition of notional interest - Calculation of benefit by taking the rate of interest @ 6% per annum - AO held that amount has been received by the assessee as a Director without any interest and therefore in terms of provision of Section 2(24)(iv) the interest free advance received by the Directors is to be treated as Benefit/perquisite received by him because he is the person who has controlled the affairs of these two companies and also other companies - HELD THAT - ITAT order in 2019 (1) TMI 2001 - ITAT DELHI wherein the Tribunal has dealt and decided this issue by following the order of the Tribunal in Assessment Year 2009-10 2018 (3) TMI 1575 - ITAT DELHI wherein set aside ground of the appeal of the revenue to the file of the Ld. assessing officer with a direction to the assessee to show before him that how the about transaction of receiving loan from a firm to the assessee free of interest where a company where the assessee is director which is provided huge interest free funds to such firm is not chargeable to tax as income under section 2(24)(iv) - AO may examine the arguments of the assessee and decide the issue afresh in accordance with the law after granting assessee adequate opportunity of hearing. Accordingly ground No. 3 of the appeal of the revenue is allowed with above direction. Thus respectfully following the aforesaid precedent in assessee s own case we restore all this issues raised before us to the file of the Assessing Officer for reconsideration as per the direction of the Tribunal. Appeals of the assessee are allowed for statistical purposes.

Summary

Issues:
1. Addition of benefit/perquisite u/s.2(24(iv) of the Income Tax Act, 1961.
2. Invocation of provisions of Section 115BBE of the Act.
3. Remand of the issue to the Assessing Officer for reconsideration.

Analysis:
1. The appeals were filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals) for the Assessment Years 2012-13, 2013-14, and 2014-15. The main issue revolved around the addition of Rs.4,64,50,348 as benefit/perquisite u/s.2(24(iv) of the Income Tax Act, 1961. The Assessing Officer treated the interest-free advance received by the assessee as a Director from certain companies as a benefit/perquisite. However, the Ld. CIT(A) deleted this addition based on previous decisions in favor of the assessee. The Tribunal, following the precedent, remanded the issue back to the Assessing Officer for reconsideration.

2. The second issue pertained to the invocation of Section 115BBE of the Act. The Ld. CIT(A) had erred in holding that these provisions cannot be invoked. The Tribunal, after considering the arguments, decided to set aside the orders of the authorities below and restore the matter to the file of the Assessing Officer for reconsideration. The Departmental appeal was allowed for statistical purposes, and the Cross Objection of the assessee was dismissed as it became infructuous.

3. The Tribunal acknowledged that similar issues had been considered in earlier years and had been remanded back to the Assessing Officer for reconsideration. Following the precedent set in the assessee's own case, the Tribunal restored all the issues raised before them to the file of the Assessing Officer for fresh consideration. Consequently, all the appeals of the assessee were allowed for statistical purposes, and the matter was remanded back to the Assessing Officer for further proceedings.

This detailed analysis highlights the key legal issues, the arguments presented by both parties, and the Tribunal's decision to remand the matter back to the Assessing Officer for reconsideration based on previous precedents and legal interpretations.