2018 (4) TMI 554

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the head "salary", "business" and "other sources". The assessee declared income from money lending business under the head "Business". The Assessing Officer noticed that the assessee has paid interest on the loan taken by him @ 9% and 10%. However, he has charged interest from the advances made by him at varying rate like 3.25%, 4.25%, 6%, 10%, 12% and 14%. Even though, the assessee submitted that the rate of interest is charged on the loans by considering various factor like relationship, availability of funds, past performance, period and size of loan etc., yet the Assessing Officer took the view that charging of interest at a lower rates like 3.25%, 4.25%, 6% etc. is not a prudent practice followed by a prudent businessman. Accordingly t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....arned Departmental Representative submitted that the learned CIT(A) was justified in directing the Assessing Officer to compute differential interest by adopting interest rate of 12%. 6. We have heard rival contentions and perused the record. Admittedly, various reasoning given by the assessee for charging interest on loans at interest rate of 3.25%, 4.25% and 6% etc., is against trade practice and beyond the scope of human probabilities. No prudent businessman shall lend money at such a lower rate, when he is borrowing money @ 9% and 10%. The purpose of carrying business is to earn profit and no businessman will do this knowing full well that he would be incurring loss in this process. We notice that the assessee has not cited any compell....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssee became one of the assignees of the brand name on 18.3.2000. Thereafter the assessee purchased full right on 22.2.2007. In the meantime, one of the ex-employee of the public limited company also applied for trade mark "Ask Me" in his name in the year 2006, but he also assigned all his right in favour of the assessee on 14.5.2008. Accordingly, the assessee became the full owner of brand name "Ask Me". During the year under consideration, the assessee sold brand name for a sum of Rs. 210 lakhs. The assessee claimed a sum of Rs. 28.63 lakhs as expenditure and offered balance amount of Rs. 181.37 lakhs as his income under the head "income from other sources". The Assessing Officer examined the details of expenditure claimed by the assessee.....