Section 148, read with section 2(24), of the Income-tax Act

HIGH COURT OF CALCUTTA Mohan Singh Oberoi v. Income-tax Officer ASHIM KUMAR BANERJEE AND TAPAS KUMAR GIRI, JJ. F.M.A. NO. 1720 OF 1997 AND 2909 OF 2002 August 10, 2007 Section 148, read with section 2(24), of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Whether benefit derived by assessee out of interest free loans granted by two companies to her husband could not be said to be her income - Held, yes - Whether therefore, notice issued by Assessing Officer under section 148 to bring to tax such benefit could not be sustained - Held, yes FACTS After completion of the assessment of the assessee, the Assessing Officer found that the assessee derived benefit out of interest-free loans granted by two companies to her husband. The Assessing Officer was of the view that since the assessee obtained benefit of such loan through her husband free from interest such benefit was to be treated as her income and should have been reflected in return, having not shown such income in the tax return, the assessee escaped assessment of such income. Accordingly, the Assessing Officer issued notice under section 148 for reopening, the assessment. Against that, the assessee filed writ petition which was dismissed by the Single Judge. On appeal: HELD The notices in question had been issued presumably to rope in the assessee under section 2(24)(iv). The Division Bench in CIT v. P.R.S. Oberoi [1990] 183 ITR 103/51 Taxman 355 (Cal.) held that the interest-free loan could not be said to be ‘income’. Such finding was noted with approval by the Supreme Court in V.M. Salgaocar & Brothers (P.) Ltd. v. CIT [2000] 243 ITR 383/110 Taxman 67(Cal.) and reiterated by the High Court in Ishran Devi Oberoi v. ITO [2001] 250 ITR 362/[2002] 120 Taxman 461(Cal.). In view of the said decisions, there was no scope of disagreement on that score. Hence the impugned notice were liable to be quashed and set aside. [Para 11] CASE REVIEW: CIT v. P.R.S. Oberoi [1990] 183 ITR 103/51 Taxman 355 (Cal.) V. M. Salgaocar & Brothers (P.) Ltd. v. CIT [2000] 243 ITR 383/110 Taxman 67 (SC). Ishran Devi Oberai v. ITO [2001] 250 ITR 362/[2002] 120 Taxman 461 (Cal.) - followed.