Income from House Property :

Court :
High Court

Brief :
The ITO added 'interest' on interest free loan given by lessee to lessor as 'notional rent'. HC said no.

Citation :
CIT vs Hemaraj Mahabir Prasad Ltd

C.I.T. Vs. Hemraj Mahabir Prasad Ltd. 8/10/2005 (2005) 279 ITR 522 (Cal) Case Fact: Whether A.O. is justified in adding interest on interest free loan given by lessee to the lessor as notinal rent to compute the Income from House Property. Decision: Held by hon"ble court that any profit or benefit arising from the interest free loan/advance given by lessee to the lessor would be taken into account in computing the income of the assessee under other heads. In the absence of any specific provision in sec. 22 or 23 A.O. cannot add such notional interest to the rental income of the assessee.

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Judgement posted by

CA.Saibaburao Nanduri

Chartered Accountant

I am a commerce graduarte of Andhra University. Studied at HINDU COLLEGE, Guntur. Became FCA and started Practice under the name and style of M/s SAIBABU RAO CO I became Chairman of CA Institute, Guntur Branch, during the year 2008-09 My post qualifications are: Information Systems Audit DISA (ICAI) ... Read more

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