2025 (9) TMI 1568

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....eleted the addition of Rs. 8,46,66,000/- made by the Assessing Officer towards notional interest received by the respondent-assessee. That order was passed on 31.03.2022 u/s 147 r.w.s. 144B of the Income Tax Act, 1961 ('Act' for short). The appeal relates to assessment year 2017-18. 2. The assessee is engaged in the business of construction of 4-laning of Solapur to Yedeshi section of NH-211 in Maharashtra. The assessee was incorporated by IRB Infrastructure Developers Limited (IRB) in compliance with National Highways Authority of India (NHAI) bid conditions, as a Special Purpose Vehicle (SPV) for the development, operation and maintenance of infrastructure facilities. The assessee has contracted out the construction of the road to IRB ....

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.... carried interest @ 11% p.a. In that view of the matter, the Assessing Officer has computed the notional interest on the advances given to the principal EPC contractor @ 10.35% at Rs. 8,46,66,000/- which is added as income u/s 37 of the Act. 7. According to the assessee, as per the EPC contract and the prevalent practice in the business and industry, the assessee was obliged to provide interest free mobilization advance to the EPC contractor which did not carry any interest. It was contended that unless and until income is actually received, no addition can be made on the basis of notional income. The assessee also challenged the reopening on the ground that it was a mere change of opinion, the issue already having been examined by the A....

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.... dated 29.03.2014. 13. We have considered the submissions made. In this case, the record discloses that the case was taken up for a complete scrutiny and eventually the Assessing Officer passed an order on 19.07.2019 without making any addition. Although, the Assessing Officer has subsequently observed that there was certain material and information on the basis of which he came to the conclusion that income assessable to tax had escaped assessment, no such information or material is pointed out particularly when the case was subjected to scrutiny earlier. We, therefore, find that the re-opening was merely based on change of opinion. The CIT(A) has refused to examine the challenge to the reopening on the ground that on merits the assesse....