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TMI Blog2025 (4) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Department (for brevity the "AO"), passed U/s 143(3)read with section 144B of the Act, date of order 29/09/2022. 2. The revenue has taken the following grounds of appeal:- "1. Whether, on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,65,20,750/- made on account of notional interest purportedly earned on an unsecured, interest free loan claimed by the assessee in the Income Tax Return (ITR)? 2. Whether, on the facts and in the circumstances of the case, the Ld. CITIA) has erred in rejecting the applicability of IT Rule 3(7)(i), which pertains to the valuation of perquisites, or in not considering the said income as "Income from Other Sources"? 3. Whether, on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is investment as interest generating fund and calculated the notional interest amount to Rs. 2,65,20,833/- and the said amount was duly added back with the total income of the assessee towards interest earned on the interest free unsecured loan from M/s Reliance Progressive Traders Pvt Ltd. Aggrieved assessee filed an appeal before the Ld. CIT(A).Ld.CIT(A) considering the submission of the assessee deleted the addition. Being aggrieved, the revenue filed an appeal before us. 4. The Ld.DR vehemently argued and relied on the order of the revenue authorities. 5. The Ld.AR submitted written submission, containing pages 1 to 81 which is kept in record. The Ld.AR stated that the said amount of Rs. 30 crores was duly received from M/s RPTPL in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the submissions of the assessee, the AO concluded the assessment by making addition of Rs. 2,65,20,833/-towards interest earned on the interest free unsecured loan without issuing a show cause notice to the appellant. Even during the VC, the AO has not pointed out the proposed variation on account of interest income earned by the appellant from M/s.Reliance Progressive Traders Pvt Ltd. Hence, it is clear that the addition was made beyond the issues raised in Show cause notice or VC hearing which is in violation of principles of natural justice. 6.2.4 Further, the AO stated that the unsecured interest free loan is not allowable as per Income tax Rule 3(7)(i)is not correct. Income Tax Rule 3 talks about the valuation of perquisites, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een reimbursed to the employee under any medical insurance scheme. 6.2.5 Further, it is seen from the records that no addition on account of interest was made either in earlier assessment years or in the later years. Hon'ble Supreme Court in the case of Radhasoami Satsang SaomiBagh, Agra Vs Commissioner of Income Tax Int83 ITR 321, held that 13. We are aware of the fact that strictly speaking res judicata does not apply to income-tax proceedings Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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