Ashim Kumar Banerjee, J. - (1.) IS a loan given by a company to its director without any interest taxable under the provisions of the IT Act, 1961 (hereinafter referred to as the "said Act of 1961") ?
(2.) THESE two appeals involve the above moot question to be answered by us in this judgment. The facts of the two appeals are identical. Hence, we are disposing of both appeals by this common judgment. Facts of the case
(3.) THE appellants in both the appeals are assessed to Income Tax for the relevant assessment year. After the assessment was complete notice under Section 148 was issued for reopening the assessment on the ground that they derived benefit out of interest -free loan granted by two companies. It was alleged that the assessee, Ishran Devi Oberoi obtained benefit of the loan granted to her husband Shri Mohan Singh Oberoi by two companies, namely, M/s Hotels 1938 Limited and M/s Northern India Caterers (P) Ltd. free of interest. According to the Revenue, since the concerned assessee obtained benefit of such loan through her husband free from interest such benefit should be treated as income and should have been reflected in return. Having not shown such income in the tax return the assessee escaped assessment of such income. Hence, the assessments for the relevant years were liable to be reopened. Challenging such notice the writ petition was filed by Ishran Devi Oberoi. During the pendency of the proceeding, Ishran Devi Oberoi died leaving her surviving her heirs and legal representatives under her will. The appellant in F.M.A. No. 1720 of 1997 was the executor to her estate. The appellant Prithivi Raj Singh Oberoi in Appeal No. 2909 of 2002 was also a director of the above named companies. He was also served identical notice on similar charge. Altogether four writ petitions were heard by the learned Single Judge in respect of different assessment years, His Lordship disposed of the writ petitions by the common judgment and order dt. 30th July, 1991, impugned in these appeals. It" was contended on behalf of the appellants that at the time of original assessment all relevant queries made by the ITO were duly replied to and upon consideration of all relevant documents produced before the ITO the assessments were finalised. Hence, there was no occasion for the Revenue to issue the impugned notice. The learned Judge, however, did not go into such controversy. His Lordship was of the opinion that by the impugned notice the Revenue wanted to reopen the assessment which would cause no prejudice to the appellants, as such the writ petitions were dismissed by discharging the rule issued earlier. Being aggrieved by and dissatisfied with the judgment and order of the learned Single Judge the above appeals were filed by the respective appellants. Contention of the appellants;