SHYAM SUNDAR MURARKA,MAIN ROAD V. ITO WARD3(1), MAIN ROAD

ITA 305/RAN/2025

AI Insights

This case involves an appeal by Shyam Sundar Murarka against the order of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the assessment year 2013-2014. The primary contention was regarding the notional interest taxed on a loan of Rs.1 crore given to Shree Madhusudan Shroff, which the assessee argued was not subject to tax as no interest was received. The Assessing Officer (AO) had initially reopened the assessment on suspicions of money rotation but later accepted the assessee's explanations regarding the sources of the money. The Tribunal found no evidence of interest income and thus deleted the notional interest addition. However, another addition of Rs.1,50,000 was upheld due to lack of substantiation from the assessee.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826240 (ITAT-RANCHI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 04-09-2025
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM CHANDRA MARNDI
• Assessee Lawyers: RAJIV RANJAN MITTAL
• Keywords: Notional interest

Judgement Text

" आयकर अपीलीय अधिकरण, र ाँची न्य यपीठ, र ाँची IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI GEORGE MATHAN, JM & SHRI RATNESH NANDAN SAHAY, AM आयकर अपील सं./ITA No.305/RAN/2025 (निि ारण वर्ा / Assessment Year :2013-2014) Shyam Sundar Murarka, Murarka House, Main Road, Ranchi-834001 Vs. ITO Ward-3(1), Ranchi स्थायी लेखा सं./PAN No. : ACNPM 4222 F (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्ाारिती की ओर से /Assessee by : Shri Rajiv Ranjan Mittal, AR राजस्व की ओर से /Revenue by : Shri Ram Chandra Marndi, Sr.DR सुनवाई की तारीख / Date of Hearing : 06/01/2026 घोषणा की तारीख/Date of Pronouncement : 06/01/2026 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order passed by the ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 28.08.2025 for the assessment year 2013-2014. 2. It was submitted by the Ld.AR that the assessment was reopened on the ground that the assessee has lent of Rs.1 crore and it was rotation of money. The assessee gave the explanation that it was not rotation and it had also proved the sources of money. The AO accepted and made no addition. It was the submission that subsequently the AO brought to tax the notional interest on the said loan of Rs.1 crore given by the assessee to Shree Madhusudan Shroff. It was submission that the assessee has not received any interest nor the assessee has any interest income. It was submission that the loan of Rs.1 Crore had been given to the assessee’s friend through banking channel/RTGS and the same has also been Printed from counselvise.com ITA No.305/Ran/25 2 returned back during the impugned assessment year itself. It was submission that the addition as made by the AO and as confirmed by the Ld. CIT(A) is liable to be deleted. 3. In reply, the Ld. Sr.DR vehemently supported the order of the AO and the CIT(A). 4. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the assessee is an individual. In the case of individual the income is to be assessed on the basis of cash. The assessee has given the loan out of his own personal fund. There is no evidence found to show that the assessee has received any interest. The details of the transaction between the assessee and his friend Shri Madhsudan Shroff has also been examined by the AO. Nothing has been found to show that the assessee has received any interest. This being so, notional interest cannot be added especially when the assessee has not borrowed the money but has used from his personal funds for giving the loan. In these circumstances, the addition has made by the AO and as confirmed by the Ld.CIT(A) stands deleted. 5. In regard of addition of Rs.1,50,000/- the assessee has not been able to substantiate that the same was out of his withdrawals or cash in hand. This being so, the addition made by the ld. AO and confirmed by the ld. CIT(A) stands upheld. Thus, this ground of the appeal of the assessee is dismissed. Printed from counselvise.com ITA No.305/Ran/25 3 6. In the result, appeal of the assessee is partly allowed. Order dictated and pronounced in the open court on 06/01/2026. Sd/- (RATNESH NANDAN SAHAY) Sd/- (GEORGE MATHAN) लेख सदस्य / ACCOUNTANT MEMBER न्य नयक सदस्य / JUDICIAL MEMBER र ाँची Ranchi; दिनांक Dated 06/01/2026 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिललपप अग्रेपर्ि/Copy of the Order forwarded to : आदेश िुस र/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अधिकरण, र ाँची / ITAT, Ranchi 1. अपीलार्थी / The Appellant- . 2. प्रत्यर्थी / The Respondent- 3. आयकि आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. निभागीय प्रनतनिनर्, आयकि अपीलीय अनर्किण, र ाँची / DR, ITAT, Ranchi 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// Printed from counselvise.com "