interest free loans given
This query is : Resolved
shefali soni
(Querist)
08 December 2009
If the asessee has given interest free loans to persons other than relatives then can the asessing officer calculate notional interest and add it to the income of the asessee.? is there any remedy in favour of the aseseee for this? pls guide me.
M Prabhakar Menon
(Expert)
08 December 2009
No he cant do that just to raise revenue. If he issues AO make an application u/s154 for rectification.
Ratan Sharma
(Expert)
08 December 2009
There is no question of adding back notional interest to your income. However the A.O. can disallow the interest paid proportionately if he found that money is utilised for non business purpose.
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