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Addition on account of ‘notional interest’ on loan given by assessee not justified
Case Law Details
- Case Name
- M/s Shivnandan Buildcon Pvt. Ltd. Vs CIT (Delhi High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Delhi High Court
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The logic that seems to have been applied by the revenue authorities is that the petitioner was a businessman and it would be imprudent for a businessman to advance a sum of Rs. 1.6 crores as in the case of W.P.(C) 6265/2013 to Smart Tourist Private Limited and to not charge anything in return. The explanation sought to be given by the petitioner in both these cases was that the advances were made in the course of their business and it is not at all necessary that an advance given by a businessman at all times must have an element of interest also.
There are various other considerations which ...
I think in future the department would be on the boar of business man and instruct how they will deal with the transactions.