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The Tax Publishers Madhu Mehta v. Dy. CIT [ITA No. 579/Mum/2012, dt. 11-4-2016] : 2016 TaxPub(DT) 2041 (Mum-Trib) Notional interest on loans *Facts:* Assessee was found to have taken loan for interest from some people. It was also found that she had lent to two of her relatives loan without interest. Notional interest was taxed on the loans lent by the assessee, upheld by the Commissioner (Appeals). On further appeal: Held by the ITAT in favour of the assessee that no notional addition of interest is warranted. Assessees capital balance was found to have funded the loans thus no interest bearing funds were lent thus established on facts.

The Tax Publishers

Madhu Mehta v. Dy. CIT [ITA No. 579/Mum/2012, dt. 11-4-2016] : 2016 TaxPub(DT) 2041 (Mum-Trib)

Notional interest on loans

Facts:

Assessee was found to have taken loan for interest from some people. It was also found that she had lent to two of her relatives loan without interest. Notional interest was taxed on the loans lent by the assessee, upheld by the Commissioner (Appeals). On further appeal:

Held by the ITAT in favour of the assessee that no notional addition of interest is warranted. Assessees capital balance was found to have funded the loans thus no interest bearing funds were lent thus established on facts.