https://www.taxtmi.com/caselaws?id=783741 Notional interest at 8% on interest-free loans/advances could not be added as income where no interest had accrued or was legally receivable. Applying the real income doctrine, the ITAT held that, in the absence of any interest-bearing borrowings, any presumption of diversion of borrowed funds was untenable, and where sufficient interest-free funds existed, advances are presumed to be from such funds. The "commercial expediency" test was held relevant only for allowability of interest expenditure under s. 36(1)(iii), not for imputing positive income. Non-compliance by recipient entities with s. 133(6) notices could not create a right to interest or statutory accrual. The addition was deleted and the appeal allowed. en-us Thu, 11 Dec 2025 00:00:00 +0530 Mon, 22 Dec 2025 07:49:16 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=783741 Notional interest at 8% on interest-free loans/advances could not be added as income where no interest had accrued or was legally receivable. Applying the real income doctrine, the ITAT held that, in the absence of any interest-bearing borrowings, any presumption of diversion of borrowed funds was untenable, and where sufficient interest-free funds existed, advances are presumed to be from such funds. The "commercial expediency" test was held relevant only for allowability of interest expenditure under s. 36(1)(iii), not for imputing positive income. Non-compliance by recipient entities with s. 133(6) notices could not create a right to interest or statutory accrual. The addition was deleted and the appeal allowed. Case-Laws Income Tax Thu, 11 Dec 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=783741