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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
ORDER PER C.M.Garg, J.M.
This appeal has been filed by the Revenue agaisnt the order of the CIT(A)-XXVI, New Delhi dated 4.11.2013 passed in first appeal no. 228/2012- 13 for AY 2010-11. The sole ground raised by the Revenue read as follows : “ The CIT(A) has erred in deleting reasonable addition of Rs. 7332666/- @ 12% made by the AO on account of notional interest charged on interest free advances.”
2. We have heard arguments of both the sides and carefully perused the material placed on the record of the Tribunal. The ld. Assessees’ Representative 2 Rational Builders & Developers (AR) submitted a copy of the order of the ITAT, New Delhi “F” Bench dated 29.10.2014 passed in assessees’ own appeal for AY 2009-10 and contended that the similar issue of notional interest has been decided in favour of the assessee by the Tribunal. The Ld. AR also submitted a copy of the order dated 11.8.2015 of Hon’ble High Court of Delhi passed in and contended that the Revenue’s appeal against the order of the Tribunal for AY 2009-10 (Supra) has been dismissed by Hon’ble Jurisdictional High Court and the issue of notional interest has been settled in favour of the assessee which also covered the same issue for AY 2010-11.
The DR strongly supported the action of the AO. However, we could not pointed out any basis to us which could lead us to take a different view in favour of the Revenue keeping aside the order of the Tribunal which has been confirmed by Hon’ble High Court, on the issue of notional interest.
In view of above submissions of both the sides, from the order of Hon’ble High Court dated 11.8.2015 it is amply clear that the issue of notional interest has been finally decided in favour of the assessee, dismissing the appeal of the Revenue with following observations :- “ 3. The Revenue has filed the present appeal agaisnt an order dated 29th October, 2014 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA no. 2988/Del/2013 for the Assessment Year (‘AY’) 2009-10.
4. The first issue concerns the addition of Rs. 2,88,98,869/- under section 68 of the Income Tax Act, 1961 (‘Act’) on account of unexplained cash credits. It has been concurrently held by both the CIT(A) as well as ITAT that the creditors in question were having running accounts with the assessee and that the balance belonged to the earlier years. There was no fresh credit during the year in question. The Court finds no substantial question of law arises in the above facts as far as this issue is concerned.
The second issue concerns the addition of Rs. 90,50,000/- on account of notional interest on interest free loans/advances. The ITAT
3 Rational Builders & Developers has rightly observed that there is no provision for taxing notional income as explained by the Supreme Court in Excel Industries 358 ITR 295 (SC). Consequently, no substantial question of law arises as regards this issue as well. The appeal is dismissed.”
5. On the basis of above, we are inclined to hold that the issue is squarely covered in favour of the assessee by the order of High Court dated 11.8.2015 (supra) and sole ground of Revenue devoid of merits is not sustainable and thus we dismiss the same.
Consequently, appeal of the Revenue is dismissed. Order Pronounced in the Court on 01/07/2016.