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TMI Blog2015 (10) TMI 1463X X X X Extracts X X X X X X X X Extracts X X X X ..... rtified by the Auditors. Assessing Officer has also not specified categorically that as to how the Part II & III of Schedule VI has not been followed or is against the prescribed accounting standard there is a requirement of law that waiver of loan taken for utilizing capital expansion is to be routed only through profit and loss account and cannot be credited to the 'General Reserve', i.e. directly in the Balance sheet. Thus, the finding of the CIT(A) is purely in accordance with the provisions of the law and the principle laid down by the Hon'ble Supreme Court in the case of Apollo Tyres (2002 (5) TMI 5 - SUPREME Court ). The Hon'ble Bombay High Court in the case of CIT vs Akshay Textiles Trading And Agencies (P) Ltd., [2007 (10) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Settlement (OTS) of loan by Vijaya Bank, without appreciating that the directly transfer of the amount to General Reserve without routing the same through Profit Loss Account 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the adjustment/addition in computing Book Profit u/s 115JB of the IT Act, of ₹ 3,52,78,000/- of waiver of principal amount on one Time Settlement (OTS) of loan by Vijaya Bank, without appreciating that the direct transfer of the amount to General Reserve without routing the same through Profit Loss Account is not in accordance with Schedule VI of the Companies Act, 1952. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank in the earlier years was utilized for the capital expenditure and capital expansion. Under the OTS Agreement, lumpsum payment of ₹ 7 crores against total outstanding of ₹ 12,81,12,000/- was to be made. Thus, there was waiver of ₹ 5,81,12,000/-, which was bifurcated into principal amount of ₹ 3,52,78,000/- and waiver on account of interest amount of ₹ 2,28,33,000/-. The waiver of principal amount was thus ₹ 3,52,78,000/-, which was transferred to 'General Reserve' in the balance sheet. In support of the contention that Assessing Officer cannot disturb the P L account maintained in accordance with Part II III of Schedule VI of the Company Act, reliance was placed on the decision of Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, he held that the addition made by the Assessing Officer in the book profit is not correct. 5. Before us, Ld. Counsel supported the order of CIT(A) and submitted that this issue is now well settled by series of decisions rendered by various High Court and by this Tribunal in catena of case laws some of the decisions were also filed before us. 6. The Ld. DR, on the other hand, relied upon on the order of the Assessing Officer. 7. We have heard the rival contentions and also perused relevant finding given in the impugned orders. The sole dispute raised is, whether the Assessing Officer could have made adjustment to the book profits for an amount of ₹ 3,52,78,000/-, which was on account of waiver of principal amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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