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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 bad, both in the eye of law and on the facts and against the principle of natural justice. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred, both on facts and in law, in confirming the addition of Rs. 3,41,25,895/- made by the Ld. A.O representing amount transferred by the appellant company in its audited accounts for F.Y 2008-09 from capital reserve account to Profit & Loss Account under the head prior period adjustment. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred, both on facts and in law, in confirming the addition of Rs. 3,41,25,895/- made by the Ld. A.O to the book profit of the appellant company u/s 115JB of the Income Tax Act representing principal amount of loan for purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be reduced from the P & L Account, as determined u/s 115 JB (2) of the I.T. Act, 1961. In view of the same, the amount is added back to the income of the assessee as the assessee has failed to prove that above amount has been offered to tax in the earlier years when the same was accrued to the assessee u/s 115J or 115JB of the I. T. Act, 1961. The assessee in his own submission has mentioned that the principle loan amount of Rs. 3,41,25,895/-, being the waiver amount has been transferred to Capital Reserve in the year 1998. Therefore, this amount has been directly taken to reserves and has never been an item of the P & L Account for the earlier years under consideration. Therefore, it is very clear that the same has never been offered for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r book. The ledger account of the loans with Bank of India is also enclosed at Pages 95 to 97 of the paper book. Notes to balance-sheet for the year ended on 31/3/1998 (Page 92 of the paper book) and for the year ended on 31/3/1997 Page 102, 103 of the paper book also makes it absolutely clear. The assessee, therefore, submitted that the said remission of principal amount has been shown as capital reserve since the year 1997-98 to 2007-08 i.e. for almost 11 years. The Assessing Officer as well as the Ld. CIT(A) failed to appreciate that the remission of liability took place in financial year 1997-98 and not in F.Y 2008-09 and hence there was no justification for making this addition in this year. Mere transfer from one account to another ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TJ 941 where the Delhi High Court has held that waiver of the principal amount of the loan which the assessee had deducted to the capital account is not chargeable to tax in the hands of the assessee u/s 41(1) nor u/s 28 (iv) nor u/s 2(XXIV) of the Act. Special Leave Petition filed by the Revenue against the said judgment of the Delhi High Court was dismissed by the Supreme Court. Vide order dated 24th July 2009. Reliance is also placed on the following judgments:- * Mumbai High Court in the case of Mahindra and Mahindra Ltd. 261 ITR 501 (Bom) * Cochin ITAT in the case of Accelerated Freeze & Drying Co. Ltd. Vs. DCIT 31 SOT 442 * Delhi ITAT in the case of CIT Vs. Rollatainers Ltd. in ITA No. 3800/Del/2009 * Mumbai ITAT in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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