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TMI Blog2014 (1) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... ved the interest waiver which is payable to bank - This is a cash benefit received by the assessee - Therefore, section 28(iv) has no application to assessee's case – Decided against Revenue and in favour of Assessee. - ITA No. 264/Mds/2013, C.O. No. 62/Mds/2013 [In I.T.A. No.264/Mds/2013] - - - Dated:- 28-5-2013 - Dr. O. K. Narayanan And Shri V. Durga Rao,JJ. For the Appellant : Shri N. Madhavan, JCIT For the Respondent : Shri R. Vijayaraghavan ORDER Per V. Durga Rao, Judicial Member:- This appeal by the Revenue and Cross Objection at the behest of the assessee, emanate from the order of the Commissioner of Income Tax (Appeals) V, Chennai dated 18.12.2012 relevant to the assessment year 2005-06. 2. Brief facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the assessee carried the matter before the CIT(Appeals). 4. The ld. CIT(Appeals) has observed that the waiver of the interest, which was not allowed as deduction in earlier assessment cannot be taxed under section 41(1). Therefore, interest payable to the banks to the extent they have not been allowed as deduction in earlier assessment cannot be taxed under section 41(1) of the Act. Accordingly, the CIT(Appeals) directed the Assessing Officer to verify the same and delete. In so far as section 28(iv) is concerned, he has observed that if the loans were utilized for acquisition of capital assets, then the loan as well as the interest on such loans waived will be in the capital field and cannot be taxed under section 41(1) or under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 41(1) have no application. We find that there is a force in the argument of ld. Counsel for the assessee for the reason that to apply section 41(1), the assessee should have claimed earlier year any benefit and allowed by the Assessing Officer. In the present case, the Assessing Officer has not allowed deduction under section 43B to the assessee. Therefore, section 41(1) of the Act cannot be applied in assessee's case. 9. In so far as application of section 28(iv) is concerned, the ld. Counsel for the assessee has submitted that waiver of interest received by the assessee is a cash benefit and section 28(iv) do not apply in view of the case law relied on by the assessee. We also find that in the case of Iskraemeco Regent Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication to assessee's case because in view of the decision of the Hon'ble Jurisdictional High Court in the case of Iskraemeco Regent Ltd. v. CIT (supra) and also the decision of Hon'ble Delhi High Court in the case of Ravinder Singh v. CIT (supra). 12. In so far as the case law relied on by the Revenue in one of the grounds M/s. Protex Engineer Company Pvt. Ltd. [211 ITR 919(Bom.)], the facts are entirely different. In that case, the assessee has received the excess amount or advance receipt against supply etc. received in earlier years. The Hon'ble Bombay High Court has held that section 28(iv) applies to the facts of the case. 13. In view of the above facts and circumstances, the grounds raised by the Revenue are dismissed and the Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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