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आदेश/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 16.10.2017 of the Commissioner of Income Tax (Appeals)-3, Ludhiana [hereinafter referred to as ‘CIT(A)’] agitating the confirmation of addition of notional interest @ 12% on the interest free advances made by the assessee to her close relatives i.e. son and nephew.
At the outset, Ld. Counsel for the assessee has brought our attention to the record of the lower authorities for making / confirmation of the aforesaid additions only on the basis of assumptions and presumption, without any reliable evidence. It was noted by the Assessing officer that that the assessee had not charged any interest on the advances given to her son and nephew. The Assessing officer has pointed out three entries in this
ITA No. 1624/Chd/2017- Smt. Swaran Lata, Patiala 2 respect. Firstly, the assessee had advanced an amount of Rs. 10 lacs to her nephew Shri Jatinder Singla without charging any interest. Further, an amount of Rs. 17 lacs was advanced without interest to her son Shri Sachin Kansal which the assessee has claimed that the actual payment was of Rs. 16 lacs and not Rs. 17 lacs. The third entry is regarding the advancement of amount of Rs. 15 lacs to M/s Anmol Enterprises, proprietorship concern of her nephew Shri Jatinder Singla, but the same was advanced at an interest rate of @ 9% per annum. The Assessing officer observed that the assessee, on the other hand, had taken some car loan on interest basis. He, therefore, assumed that the assessee might have taken interest @ 12% from the aforesaid persons and accordingly made the addition of @ 12 % on the interest free advances made to her son and her nephew and further added 3% interest in the case of M/s Anmol Enterprises to whom the assessee charged interest @ 9%.
Simply because the assessee has taken some car loan on interest basis that itself in our view, cannot be a ground to make the impugned additions. The loanees are the close relatives of the assessee and it is the own will or wish of the assessee whether to charge interest from her close relatives like her son or nephew or not. There is no evidence that the assessee has charged any interest from the aforesaid persons. In view of this, the additions made by the Assessing officer and further confirmed by the CIT(A) are not sustainable in the eyes of law and the same are accordingly ordered to be deleted. In the result, the appeal of the assessee is hereby allowed. Order pronounced in the Open Court on 12.11.2018
Sd/- Sd/- ( बी , आर . आर . कुमार / B.R.R. KUMAR) (संजय गग� / SANJAY GARG ) लेखा सद�य/ Accountant Member �या�यक सद�य /Judicial Member
ITA No. 1624/Chd/2017- Smt. Swaran Lata, Patiala 3
Dated : 12.11 .2018 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar