Notional interest on family advances cannot be taxed absent an interest agreement or actual receipt.

Notional interest could not be brought to tax on advances made to a brother where the accounts showed no agreement to charge interest and no interest was actually received. The family relationship and shared residence without rent did not provide a legal basis to impute interest income, and no material showed any obligation on the assessee to charge interest on the advance. On those facts, addition of notional interest to the assessee's income was rejected.

---

---

Issues: Whether notional interest could be added to the assessee's income in respect of advances made to his brother in the absence of any agreement for charging interest or any actual receipt of interest.

Analysis: The accounts showed no agreement for payment of interest and no interest had in fact been charged. The existence of a family relationship and residence with the brother without rent did not create a basis for treating any amount as interest or for imputing notional interest in the assessee's hands. No legal basis was shown to compel the assessee to charge interest on the advance.

Conclusion: Notional interest could not be added to the assessee's income.

---