COMMISSIONER OF INCOME TAX Vs. ASIAN HOTELS LIMITED
LAWS(DLH)-2007-12-53
HIGH COURT OF DELHI
Decided on December 10,2007

COMMISSIONER OF INCOME TAX Appellant
VERSUS
ASIAN HOTELS LIMITED Respondents

JUDGEMENT

- (1.) ITA No. 794 of 2007 is an appeal by the Revenue against the judgment dated 30th November, 2006 passed by the Income tax Appellate Tribunal (Tribunal') Delhi Bench "g", New Delhi in ITA no. 1266 (Del.)/2004 for the assessment Year 2000-01. ITA No. 998 of 2007 is an appeal by the Revenue against the order dated 9th February, 2001 passed by the tribunal in ITA no. 430 (Del.)/1998 for the Assessment year 1995-96. Since both the appeals raise an identical question, they are being disposed of by this common judgment.
(2.) THE question sought to be urged by the Revenue in both appeals is as follows: "whether the Tribunal was justified in law in holding that the notional interest on refundable interest free deposit received by the Assessee in respect of a shop let out on rent was neither taxable as business profit under Section 28 (iv) of the Income Tax Act, 1961 ('act') nor income from house property under Section 23 (l) (a) of the Act?"
(3.) THE Assessee had received interest free deposit in respect of shops given on rent. Relying on the earlier assessment for the Assessment Year 1993-94, the Assessing Officer (AO) added to the Assessee's income notional interest on the interest free deposit at the rate of 18% simple interest per annum on the ground that by accepting the interest free deposit, a benefit had accrued to the Assessee which was chargeable to tax under Section 28 (iv) of the Act. The notional interest added by the AO to the Assessee's income for the Assessment Year 1995-96 was rs. 34,48,800/- and for the assessment Year 2000-01, Rs. 35,18,370.;


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