Case Law Details
Panchiram Nahata Vs ITO (ITAT Kolkata)
The case of Panchiram Nahata Vs the Income Tax Officer (ITO) recently came before the Income Tax Appellate Tribunal (ITAT) in Kolkata. The crux of the matter lay in the assessee’s argument that no addition could be made based on notional interest due to the failure to receive interest for loan advances by the assessee Finance Company.
In the case, the assessee firm, a finance company involved in trading shares and investing in mutual funds, argued against the addition of Rs. 10,38,950, an amount calculated as notional interest. The ITAT, on evaluating the case facts, observed that the assessee’s failure to receive interest from all its loanees was a common business occurrence. The Tribunal found the assessee’s contention that notional interest income could not be estimated for making disallowances out of interest expenditure compelling. The Tribunal hence deleted the addition, ruling in favor of the assessee. Furthermore, the Tribunal rejected other disallowances related to motor car expenses, telephone expenses, and garden visit expenses due to lack of concrete evidence supporting their personal use.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 22nd December, 2022 passed for A.Y. 2014-15.
Please become a Premium member. If you are already a Premium member, login here to access the full content.