Assessment of notional interest on loans - loan has been granted...

Assessment of notional interest on loans - loan has been granted by the assessee to its sister concern - As per the provisions of Sec. 36(1)(iii) AO could have disallowed interest expenditure if the interest was paid in respect of capital borrowed which was not used for the purposes of business or profession. - Rather Ld. AO has computed notional interest on loans advanced by the assessee which do not find support of any statutory provisions. Therefore, the action of Ld. AO, in adding the notional interest on outstanding loans, in not in accordance with law and hence not sustainable. - AT

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