9911796707
TMI Blog2018 (5) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... al Leave Petition (C) No. 4977 OF 2015) CIVIL APPEAL No. 6942 OF 2015 CIVIL APPEAL No. 4539 OF 2018 (Arising out of Special Leave Petition (C) No. 6648 OF 2016) CIVIL APPEAL No. 4546 OF 2018 (Arising out of Special Leave Petition (C) No. 29776 OF 2016) R. K. Agrawal And Abhay Manohar Sapre, JJ. JUDGMENT R.K. Agrawal, J. Civil Appeal Nos. 6949-6950 OF 2004 1) Leave granted. 2) These appeals have been filed against the impugned judgment and order dated 29.01.2003 passed by the High Court of Judicature at Bombay in R.A.No.1561 (Bom)/1982 and R.A.No.5161/B/80 whereby the Division Bench of the High Court while giving answers to the Reference Applications filed by the Respondent as well as the Revenue, confirmed certain findings passed by the Income Tax Appellate Tribunal (in short 'the Tribunal') dated 16.08.1982 in favour of the Respondent. Along with this, there are certain other connected appeals also. Since the question of law is same in all these appeals, all the appeals would stand disposed off with this common judgment. 3) Brief facts:- (a) For the proper appreciation of the issue in the case at hand, we deem it apposite to mention the gist of the facts. The appellant he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal and upheld the order of the ITO with certain modifications. (g) Being aggrieved, the Respondent as well as the Revenue preferred appeals being Nos. 2007 (Bomb.) of 1981 and 2132 of 1981 respectively before the Tribunal. The Tribunal, vide order dated 16.08.1982, set aside the order passed by learned CIT (Appeals) and decided the case in favour of the Respondent. (h) Being aggrieved, the Revenue filed a Reference before the High Court at Bombay. In that Reference, three applications were filed, one by the assessee and rest two by the Revenue. Vide impugned common judgment and order dated 29.01.2003, the High Court confirmed certain findings of the Tribunal in favour of the Respondent. (i) Hence, these instant appeals have been filed by the Revenue. 4) Heard learned senior counsel for parties and perused the factual matrix of the case. Point(s) for consideration:- 5) The short point for consideration before this Court is whether in the present facts and circumstances of the case the sum of Rs. 57,74,064/- due by the Respondent to Kaiser Jeep Corporation which later on waived off by the lender constitute taxable income of the Respondent or not? Rival contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deserve to be dismissed. Discussion:- 10) The term "loan" generally refers to borrowing something, especially a sum of cash that is to be paid back along with the interest decided mutually by the parties. In other terms, the debtor is under a liability to pay back the principal amount along with the agreed rate of interest within a stipulated time. 11) It is a well-settled principle that creditor or his successor may exercise their "Right of Waiver" unilaterally to absolve the debtor from his liability to repay. After such exercise, the debtor is deemed to be absolved from the liability of repayment of loan subject to the conditions of waiver. The waiver may be a partly waiver i.e., waiver of part of the principal or interest repayable, or a complete waiver of both the loan as well as interest amounts. Hence, waiver of loan by the creditor results in the debtor having extra cash in his hand. It is receipt in the hands of the debtor/assessee. The short but cogent issue in the instant case arises whether waiver of loan by the creditor is taxable as a perquisite under Section 28 (iv) of the IT Act or taxable as a remission of liability under Section 41 (1) of the IT Act. 12) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance or deduction has been made is in existence in that year or not; or x x x" 15) On a perusal of the said provision, it is evident that it is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee. Then, subsequently, during any previous year, if the creditor remits or waives any such liability, then the assessee is liable to pay tax under Section 41 of the IT Act. The objective behind this Section is simple. It is made to ensure that the assessee does not get away with a double benefit once by way of deduction and another by not being taxed on the benefit received by him in the later year with reference to deduction allowed earlier in case of remission of such liability. It is undisputed fact that the Respondent had been paying interest at 6 % per annum to the KJC as per the contract but the assessee never claimed deduction for payment of interest under Section 36 (1) (iii) of the IT Act. In the case at hand, learned CIT (A) relied upon Section 41 (1) of the IT Act and held that the Respondent had received amortization benefit. Amorti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
