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TMI Blog2016 (2) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... is, the matter is remitted back on the short issue to the Assessing Officer. - I.T.A .No.-1246/Del/2013 - - - Dated:- 15-1-2016 - SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. Ved Jain, C.A For The Respondent : Smt. Anuja Jain, Sr. DR ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against order dated 5/12/2012 passed by Ld. CIT(A) XVII, New Delhi. 2. During the course of hearing, concise grounds of appeal are filed by the AR which are reproduced herein below: 1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax [(CIT)] is bad, both in the eye of law and on the facts and against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reduced from the book profit as per the provisions of Section 115JB of the Income Tax Act as the assessee himself shown the amount credited to the P L A/c as profit before tax and added ₹ 3,41,25,895/- to the income of the assessee. The Assessing Officer further held as under: 3.4.2 It is seen that the assessee has credited the above income as prior period income and has not offered the same u/s 115JB of the I.T. Act, 1961 as well. The Clause (i) only allows for the above amount to be reduced from Book Profit if the said amount has been offered for tax in the earlier year. The assessee has not explained as to whether the above was offered to tax in the earlier year. Therefore, the above amount cannot be reduced from the P L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The AR submitted that the assessee company is Ravi Hospitals and Nursing Homes. During the year 1987-88, the assessee acquired lithotripsy machine through loans obtained from M/s Barclays Bank. There was a steep increase in the currency rates and, therefore, the payments were made by the Bank of India under DPJ. Since, the payments made by the Bank of India under DPJ could not be made. The Bank of India filed a suit for recovery. The AR further submitted that during the financial year 1997-98 a sum of ₹ 3,41,25,895/- was waived by the Bank pursuant to the compromise and the same was transferred to capital reserve account. The financial statements for the year ended 31/3/1998 was enclosed at Page 70 to 94 of the paper book. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The issue is not of claiming exemption of income, the issue is that there is no income during the year under consideration. On the contrary, law holds that transfer from capital reserve to profit and loss account will be considered as income. Even otherwise, this addition is not sustainable. Evidently, in the present case, the assessee has not claimed any deduction in respect of in laws or expenditure for these laws it is a settled law that where there is a waiver of principle of laws which was a well for the purpose of plant and machinery then such amount of waiver cannot be taxable as income as per the provisions of Section 41(1) of the Act. A similar issue has come up in the case of CIT Vs. Tushar International Ltd 116 TTJ 941 where t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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