2019 (3) TMI 4

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....ogether and are being disposed of by this consolidated order for the sake of convenience. However, in order to adjudicate the issue, reference is being made to the facts and issue in ITA No.71/PUN/2018, relating to assessment year 2008-09. 3. The assessee in ITA No.71/PUN/2018, relating to assessment year 2008-09 has raised the following ground of appeal:- 1) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in dismissing the appeal of the assessee confirming the addition made by the A.O. of Rs. 8,13,465/- on account of hypothetical / notional interest for share application money remaining without allotment of shares. The addition of notional/hypothetical interest is not permissible in law as....

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.... the interest @ 5% to 7% per annum i.e. rate of bank fixed deposits. The Assessing Officer observed that investments were made from 01.04.2003 to 31.03.2007 amounting to Rs. 36,36,000/-. Sum of Rs. 4 lakhs and Rs. 10 lakhs were returned back on 31.08.2007 and 24.09.2007 leaving balance of Rs. 22,36,000/- as on 31.03.2008. The Assessing Officer in this regard observed that no prudent businessman would make such huge investments without earning any benefits and he brushed aside the plea of assessee that the benefits such as incentives and discounts were granted, as normal discounts and did not accept the plea of assessee. The Assessing Officer in this regard thus, worked out interest @ 7% on the aforesaid deposits date-wise and made an add....