IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  07.07.2008 
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 Present:        Mr Sanjeev Sabharwal for the Appellant. 
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 + ITA 764/2008 
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 This appeal is directed against the order passed by the Income Tax 
 Appellate Tribunal on 30.11.2007 in ITA 239/Del/2006 concerning the assessment 
 year 2001-02.  The Assessing Officer had noted that in the preceding year the 
 assessee had credited an amount of Rs 36,89,451 under the head of ?Other 
 Income?.  However, no interest was disclosed during the current year.  The 
 assessee has explained this by stating that there were certain trade debtors who 
 had not been making payments and in order to recover the debts they were 
 notified that in case the payments were not made, interest @?18% per annum would 
 be charged on the outstanding amount.  The interest amount was calculated and 
 shown on accrual basis in the books for the immediately preceding year. 
 However, according to the assessee, despite such notices to the debtors, they 
 refused to make the payment and the assessee, for the current year, ceased to 
 show the interest as accruing on the outstanding balance. 
 The Assessing Officer computed notional interest @ 18% and accordingly 
 added an amount of Rs 25,37,679/-.  The appeal made by the assessee before the 
 Commissioner of Income Tax (Appeals) was successful inasmuch as the addition was 
 deleted.  The same point was argued by the revenue in its appeal before the 
 Income Tax Appellate Tribunal.  After considering the facts and circumstances of 
 the case and the arguments advanced by the parties before the Tribunal, the said 
 Tribunal came to the view that in the absence of any agreement to charge any 
 interest on the debts due from the trade debtors, the decision not to charge 
 interest on the basis of commercial expediency could not be doubted.  The 
 Tribunal also found that there was no material to show any collusive arrangement 
 between the assessee and the trade debtors with a motive to defraud the revenue. 
 Consequently, the Tribunal upheld the order of the Commissioner of Income Tax 
 (Appeals).  No substantial question of law arises in this case.  Dismissed. 
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 BADAR DURREZ AHMED, J 
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 RAJIV SHAKDHER, J 
 July 07, 2008 
 SR 
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