9911796707
TMI Blog2014 (10) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, 1961, preferred by the Revenue is directed against order dated 30.09.2012 of the Income Tax Appellate Tribunal, Ahmedabad Bench `A', in Income Tax Appeal No.3075 of 2010. 1.1 The appellant has proposed the following question as a substantial question of law: "Whether the Appellate Tribunal has substantially erred in deleting the addition of Rs. 39,86,000/- on account of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 329.64 lakhs. As per the opinion of the Assessing Officer, the assessee should have accounted for the income and expenditure on accrual basis, and therefore, he added the amount as notional interest. The explanation of the assessee was that the advances of Rs. 329.64 lakhs were interest free loans and that no interest was charged on those advances right from the inception. The assessee produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to tax. The addition of Rs. 39,86,000/- is deleted." 3.3 The order of the CIT(A) was carried in appeal by the Department before the Income Tax Appellate Tribunal, which came to be dismissed as per the impugned order. The Tribunal confirmed the order of the CIT(A) and held, "6. ... We find that the learned CIT(A) has followed the decision of the Hon'ble Supreme Court in the case of CIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . vs. CIT (242 ITR 22) for the principle that where no interest was charged on the interest free loans to sister concerns, there is no income to be charged as notional income on accrual basis. The Apex Court in CIT vs. Surji Vallabhdas & Co. (46 ITR 144) explained the point as under, "Income-tax is levy on income. No doubt, the Income-tax Act takes into account two points of time at which t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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