AO cannot tax Notional interest on interest-free advance if advance is made out of interest free funds

Assessee had advanced loan from its interest free funds and had not charged any interest, that the assessing officer had taxed notional interest in the hands of the assessee without bringing any evidence of charging of interest by the assessee. He has also not explained as to how the interest income accrued to the assessee. In the normal course of its business transaction the assessee had advanced loan and had not charged any interest. Charging or not charging of interest is a discretion of an assessee- especially when the advance is made out of interest free funds. We are of the opinion, that...