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TMI Blog2019 (1) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... In fact, the entire thrust of the Revenue's argument at the outset appears to be on clause (a) which refers to the income tax which according to the Revenue would also include wealth tax. This question, therefore, is not required to be entertained. Addition being gain on extinguishment of debentures / bonds treated as income u/s 41(1) - Held that:- In the present case, the Revenue has not established these basic facts. In other words, it is not even the case of the Revenue that in the process of issuing the bonds, the assessee had claimed deduction of any trading liability in any year. Any extinguishment of such liability would not give rise to applicability of sub-section (1) to Section 41 of the Act. Also notice that the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no finding that the assessee had made illegal payment. It appears that the payments were made by an agent and there was no evidence to suggest that the assessee had made any illegal commission payment to Iraqi government. The Tribunal confirmed this view of the CIT(A). The entire issue is thus based on appreciation of materials on record and is a factual issue. No question of law arises. - INCOME TAX APPEAL NO. 993 OF 2016 - - - Dated:- 15-1-2019 - AKIL KURESHI M.S. SANKLECHA, JJ. Mr. Tejveer Singh for the Appellant Mr. Jehangir Mistry, Senior Counsel a/w Mr. Madhur Agrawal, Mr. P.C. Tripathi, Mr. Amit R. Mathur i/by A. Raj Darak for the Respondent P.C.: 1. Revenue is in the appeal against the Judgment of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of this Court in the case of CIT Vs. Echaj Forging Pvt Ltd 251 ITR 15 in which such an issue had come up for consideration. 3. Learned counsel for the Revenue, however, submitted that the decision of this Court in the case of Echaj Forging Pvt Ltd (supra) proceeded on the concession made by the Revenue's counsel and the Tribunal, therefore, committed an error in treating it as ratio of the High Court decision. On the other hand, the learned counsel for the assessee submitted that even otherwise, the statutory provision being clear, there is no scope for interpretation. 4. Section 115JB of the Act pertains to special provision for payment of tax by certain companies. As is well known, detailed provisions have been made to com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. This issue has a brief history which can be noted as under:- The assessee had issued Foreign Currency Bonds in the years 1996 and 1997 carrying a coupon rate of interest ranging between 10% to 11% having maturity period of 30 to 100 years. The interest would be payable half yearly. According to the assessee, on account of the attack on World Trade Centre at USA on 11.9.2001, financial market collapsed and the investors of debentures and bonds started selling them which in turn, brought down the market price of such bonds and debentures which were traded in the market at a value less than the face value. The assessee, therefore, purchased such bonds and debentures from the market and extinguished them. In the process of buy ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which has been granted in any year in respect of any loss, expenditure or trading liability. In the present case, the Revenue has not established these basic facts. In other words, it is not even the case of the Revenue that in the process of issuing the bonds, the assessee had claimed deduction of any trading liability in any year. Any extinguishment of such liability would not give rise to applicability of sub-section (1) to Section 41 of the Act. 7. We may also notice that the decision of this Court in the case of Mahindra and Mahindera Ltd (supra) came to be confirmed by the Supreme Court in the case of Commissioner Vs. Mahindra Mahindra Ltd [2018] 404 ITR 1 (SC). It was reiterated that for applicability of Section 41(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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