HEMANT GUPTA, J. - (1.) THE following 9 appeals raise common question of law i.e. whether interest on the interest free loans obtained from the Company in which either the assessee or his/her spouse was a Director, is a perquisite and an income of the assessee in terms of Section 2(24)(iv) of the Income Tax Act, 1961 (for short 'the Act'). The appeals are: JUDGEMENT_1187_TLP&H0_2011s1.htm
(2.) ALL the appeals are taken up together, as the questions of law in all these cases are identical. However, for the facility of reference, the facts and the question of law are being taken up from ITA No.95 of 2000. The question of law reads under: "Whether on the facts and in the circumstances of the case, which were clearly distinct from those in the preceding earlier year, the Tribunal was right in deleting addition of Rs.2,11,469.00 made by the AO by resorting to provisions of Section 2 (24)(iv) of the I.T. Act?" The assessee has availed interest free loan of Rs.2,25,000.00 from M/s Varinder Agro Products Pvt. Ltd.; Rs.7,82,000.00 from M/s Pashupati Enterprises Pvt. Ltd.; and Rs.10,07,000.00 from M/s Himalya Ayurvedic & Agro Research Centre Ltd. During the course of assessment proceedings, the assessee was asked to explain as to why interest income on such interest free loan be not included to assessee's income, as a deemed benefit under Section 2 (24)(iv) of the Act. The explanation of the assessee was not found to be satisfactory and the interest at the rate of 21% was brought to tax on account of deemed benefit under Section 2(24)(iv) of the Act. Such order was affirmed by the Commissioner of Income Tax (Appeals). But the Income Tax Appellate Tribunal (for short "the Tribunal") allowed the appeals by relying upon its earlier order passed in case of Varinder Gupta in ITA No.82/Chandi/96 decided on 09.12.1999 whereby interest on such interest free loans was not treated as deemed income. In the aforesaid order, the reliance was placed on a judgment of Calcutta High Court reported as CIT Vs. P.R.S. Oberoi 183ITR103.
(3.) LEARNED counsel for the assessee has argued that the revenue has not filed any further appeal against the order passed in Varinder Gupta's case (supra) relied upon by the Tribunal, therefore, the revenue cannot be permitted to dispute the findings recorded by the Tribunal. The learned Counsel for the revenue submitted that as the tax effect was not substantial in the said case, therefore, appeal was not filed. Be as it may, we have examined the question raised.;