9911796707
TMI Blog2012 (9) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has formulated the following questions of law for consideration of this Court. (a) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that the benefit of cessation of liability to repay a loan liability is not taxable u/s. 41(1) of the Income Tax Act? (b) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that the benefit of cessation of liability to repay a loan liability is not taxable u/s. 28(iv) of the Income Tax Act? 3) On 31/10/2004, the respondent-assessee filed its return of income for the assessment year 2004-05 declaring a total income of Rs.98.23 lacs. During the course of assessment proceedings it was found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the earlier years. The issue according to the Tribunal was covered in favour of the respondent-assessee by a decision of this Court in the matter of Mahindra and Mahindra Ltd. v. Commissioner of Income Tax reported in 261 ITR 501. Consequently, the Tribunal held that amount of Rs.29.17 lacs is not taxable either under Section 41(1) or 28(iv) of the Act. 6) In support of the appeal, Mr. Vimal Gupta, the learned Counsel for the revenue contends that the decision in the matter of Mahindra and Mahindra Limited (supra) would not be applicable in view of the subsequent decision of this Court in the matter of Solid Containers Ltd. v. Deputy Commissioner of Income Tax reported in 308 ITR 407. In the above case, this Court has distinguished t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee therein had taken a loan for business purpose. In view of the consent terms arrived at, the amount of loan taken was waived by the lender. The case of the assessee therein was that the loan was a capital receipt and has not been claimed as deduction from the taxable income in the earlier years and would not come within the purview of Section 41(1) of the Act. However, this Court by placing reliance upon the decision of the Apex Court in the matter of CIT v. T.V. Sundaram Iyengar and Sons Ltd. 222 ITR 344 held that the loan was received by the assessee for carrying on its business and therefore, not a loan taken for the purchase of capital assets. Consequently, the decision of this Court in the matter of Mahindra and Mahindra Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
