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TMI Blog2017 (6) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal amount of loan by JSPL does not constitute income at the hands of the assessee. On the facts of this case and particularly having regard to the nature of business only, it will constitute capital receipt. There is difference between ‘trading liability’ and ‘other liability’. Section 41 (1) of the IT Act particularly deals with the remission of trading liability. Whereas in the instant case, waiver of loan amounts to cessation of liability other than trading liability. Hence, we find no force in the argument of the Revenue that the case of the Respondent would fall under Section 41 (1) of the IT Act. - Thus answer the question in favour of the assessee and against the Revenue - D.B. Income Tax Appeal No. 160/2017 - - - Dated:- 2-6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntirely different. In that case, the transaction in question was treated as lease transaction in the earlier assessment years and depreciation was granted on that basis. However, in the assessment year in question, the same very transaction was treated as financial transaction and depreciation was disallowed. It was in this backdrop, the Supreme Court opined that the depreciation given to the assessee could not be withdrawn, (sic) when the finding of fact that the transaction in question was leased and not financial transaction had become final and had not been challenged. 8. With this, we proceed to examine this aspect on its own merit, viz., whether provisions of Section 28(iv) of the Act are attracted in the given case. Thus, what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in CIT vs. Xylon Holdings (P) Ltd. in ITA No.3704/2010 decided on 13.9.2012 and decision of Gujarat High Court in Commissioner of Income Tax-I vs. Gujarat State Fertilizers and Chemicals Ltd. (2013) 217 Taxman 343 (Guj.). 5.Counsel for the department Mr. Mathur has supported the judgment of the Tribunal and contended that in view of the observations made by the Supreme Court in Polyflex (India) Pvt. Ltd. vs. Commissioner of Income Tax (2001) 251 ITR 527 wherein it has observed as under:- We are inclined to think that in a case where a statutory levy in respect of goods dealt in by the assessee is discharged and subsequently the amount paid is refunded, it is the first clause that more appropriately applies. U will not be a case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory or contractual right. When such a thing happens, commonsense demands that the amount should be treated as income of the assessee. The assessee had received deposits in course of its business which were originally treated as capital receipts. Some of the deposits were neither claimed by nor returned to the depositors. There is no dispute that the deposits were received in course of the carrying on of the business of the assessee. Although it was treated as deposit and was of capital nature at the point of time it was received, by influx of time the money has become the assessee's own money. What remains after adjustment of the deposits has not been claimed by the customers. The claims of the customers have become barred by lim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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