Notional interest on dealer security deposits was excluded from assessable value absent proof of price depression.

Notional interest on security deposits or advances received from dealers was held not to form part of the assessable value, because the Revenue failed to establish any nexus between the deposits and the price charged or any evidence that the deposits depressed the price. The Tribunal agreed with the Commissioner (Appeals) that, without proof of a connection between the advance and a lower price, imputing interest was unwarranted. The conclusion aligned with cited judicial precedents and departmental instructions, and the assessee obtained relief.

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Issues: Whether notional interest on security deposits or advances received from dealers was includible in the assessable value.

Analysis: The Commissioner (Appeals) had found that the Revenue failed to show any nexus between the deposits and the price, or any material to prove that the deposits depressed the price. The Tribunal agreed that, in the absence of evidence showing a connection between the advance and a lowering of price, notional interest could not be added to the assessable value. The findings were consistent with the cited judicial precedents and departmental instructions.

Conclusion: Notional interest on the security deposits was not includible, and the assessee was entitled to relief.

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