2001 (4) TMI 70

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..... has escaped assessment of an income but in fact there cannot be any reason to believe nor the same has been spelt out in the affidavit-in-opposition. In the affidavit-in-opposition it has been stated that since the petitioner enjoyed interest-free loan and such benefit of non-payment of interest cannot be termed to be an income within the meaning of section 2(24) of the Income-tax Act, 1961. Dr. Pat contends that a Division Bench of this court has held, while deciding the question as to whether a benefit and/or enjoyment of interest-free loan can be termed to be an income within the meaning of section 2(24)(iv) of the Act, that non-charging of interest or for that matter non-payment of interest on the loan cannot be termed to be a benefit .....

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..... art of the respondents in issuance of the aforesaid impugned notice. Having heard respective contentions of learned counsel, I am of the view that the question falling for consideration is as to whether the impugned notice issued by the respondent is sustainable on the basis of the disclosed reasons mentioned in the affidavit. Mr. Agarwal is not really disputing under what circumstances the aforesaid impugned notice should be issued. I am of the further view and it is a settled position of the law that there are conditions which are to be fulfilled before exercising of power under section 148 for issuance of the impugned notice. These conditions are that the concerned authority must have reason to believe that there is escapement of incom .....

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..... n the absence of any finding that the company has paid any interest on the overdrawn amount which, but for such payment, would have been paid by the assessee, the amount cannot be treated as a benefit within the meaning of section 2(24)(iv) of the Act." This judgment has been approved by the Supreme Court as cited by Dr. Pal which has been reported in V. M. Salgaocar and Bros. P. Ltd. v. CIT [20001 243 ITR 383. In view of the aforesaid, I have no option but to hold that the benefit which is treated to be an income is not a benefit nor can be termed to be an income within the meaning of section 2(24)(iv) of the Act. If it is not an income at all, the question of escapement does not arise. Therefore, the conditions for issuance of the not .....

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