2024 (1) TMI 1191

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....of law arising out of the order dated 31.10.2022 passed by the Income Tax Appellate Tribunal, Rajkot (for short "the Tribunal") in ITA No. 113/RJT/2018 for the Assessment Year 2011-12: "(i) Whether the Hon'ble Tribunal has erred in upholding the order of the Ld. CIT(A) wherein the addition of Rs. 35,00,00,000/- made by the AO on account of notional interest @10% on deposit made of Rs. 350 crores to M/s. Sanman Holdings Pvt. Ltd.? (ii) "Whether the Hon'ble Tribunal has erred in upholding the order of the Ld. CIT(A) even though the Hon'ble ITAT itself vide order dated 11.11.2016, dismissed the appeal of the assessee by upholding the order of the Ld. PCIT made u/s. 263 on the issue of accrued interest income on de....

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....formed the assessee that the company was passing through critical financial crisis and was incurring losses and therefore it would not be possible to provide the interest with effect from 01.04.2010 and that the Board of Directors were contemplating amalgamation of the company with M/s. Tanti Holding Private Limited with effect from 01.04.2010, subject to approval of the High Court of Bombay and the High Court of Gujarat. 3.4. Subsequently M/s Sanman Holdings Private Limited amalgamated with M/s. Tanti Holdings Private Limited after obtaining approval from the High Court. The assessee therefore submitted before the CIT(A) that M/s Tanti Holdings Private Limited informed on 13.09.2011 that it acknowledges the liability to pay the principa....

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.... date of such event. We also observe that in the subsequent assessment years 2012-13 and 2013-14, the Revenue itself did not make any such additions on account of notional interest, even though the deposit of the assessee with M/s Tanti Holdings Private Limited is still outstanding. The assessee has also placed on record before us copy of letter dated 31- 03-2010 by M/s Sanman Holdings Private Limited to the assessee intimating its inability to pay interest due to financial crisis. The assessee has also placed on record copy of letter dated 30-09-2011 of M/s Tanti Holdings Private Limited in which it stated that the company M/s Sanman Holdings Private Limited amalgamated into it with effect from 01-04-2010 and also acknowledging the liabili....