Law:

Section:

Section 4 of Income-tax Act, 1961 - Income - Chargeable as Where Tribunal had given a finding that interest-free advances given represented only 8.8 per cent of loans taken by assessee, it Tribunal was right in holding that notional interest should not be charged in spite of fact that borrowed funds were utilized for non-business purpose The assessee was in the business of financing. The dispute of the revenue was against the non-charging of interest on some of the interest-bearing amounts advanced to some concerns. The Tribunal held that interest free loans were given by the assessee as a prudent businessman with certain commercial and business purpose in mind, and that the interest-bearing funds had been used for the purpose of business. Thereafter the Tribunal gave a finding that the interest-free advances given represented only 8.8 per cent of loans and held that notional interest could not be charged to tax. Held that the finding of Tribunal was finding of fact and no substantial question of law arose from its order. Section 68 of the Income-tax Act, 1961 - Cash credit Where assessee had deposited cash of Rs. 7,25,000 and explanation given by assessee was that it was advance against sale of air-conditioning units received from different parties and Tribunal, after receiving confirmation of concerned parties, deleted addition, holding that deposit was explained, it was justified in deleting addition The assessee had deposited cash of Rs. 7,25,000 and the explanation given by the assessee was that it was advance against the sale of air-conditioning units received from different parties. However, an addition was made on account of this cash. The Tribunal after considering the explanation and confirmation gave a finding to the effect that the ledger account of the parties in the books of account had duly been confirmed by mentioning 'We hereby confirm the above statement'. The Tribunal thus, deleted the addition holding that cash deposited in the bank account should not be treated as unexplained cash credit. Held that the finding of the Tribunal was finding of fact and no substantial question of law arose from its order. R. Ashokan for the Appellant. Ramesh C.…

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