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TMI Blog2021 (8) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... ND SONS, supra, to the case of the assessee wherein it was held that unclaimed balances out of deposits received from customers which were transferred to profit and loss account were assessable as income. Thus, the order of the Assessing Officer on account of incorrect application of the law, can be said to be erroneous in view of the law laid down by the Supreme Court in MALABAR INDUSTRIAL COMPANY, [ 2000 (2) TMI 10 - SUPREME COURT] Therefore, one of the conditions for invocation of Section 263 of the Act namely the order being erroneous is fulfilled in the fact situation of the case. For the aforementioned reasons, the substantial questions of law are answered against the assessee and in favour of the revenue. - I.T.A. NO.219 OF 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al amount of principal amount of loan of ₹ 28,69,99,731/- and interest of ₹ 29,94,92,388/- which was waived by the Banks as per settlement schemes with several Banks and the interest component of the waiver which was allowed as deduction in previous years was offered for assessment. Similarly, for the Assessment Year 2006-07, the return was filed. The Assessing Officer passed an order of assessment for Assessment Years 2005-06 and 2006-07 on 20.12.2007 and 20.12.2008 accepting the fact that the loans waived were not income includible in the assessment for taxation. 3. The Commissioner of Income Tax issued notices under Section 263 of the Act on 30.09.2009 for both the Assessment Years proposing to revise the orders on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order of assessment was passed on 28.12.2007 whereas the judgment in SOLID CONTAINERS LTD., supra was rendered by the Bombay High Court subsequently i.e. on 29.08.2008 which was not available when the order of assessment was passed. It is further submitted that the order of Assessing Officer cannot be said to be erroneous and therefore, the assumption of jurisdiction under Section 263 of the Act is not legally tenable. It is also urged that waiver of loan is not liable to be taxed either under Section 41(1) or under Section 28(iv) of the Act in view of decision of Supreme Court in 'CIT Vs. MAHINDRA MAHINDRA LTD.' (2018) 404 ITR 0001 (SC). In support of aforesaid submission, reliance has been placed on the decisions i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, it is apposite to take note of Section 263 of the Act which reads as under: 263. Revision of orders prejudicial to revenue (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he, may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. 7. Thus, from close scrutiny of Section 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant previous year ended 31.03.2005, but, was excluded by the asseseee while computing the taxable income relying on the decision in the case of CIT vs. Chetan Chemicals Pvt. Ltd. reported in 139 taxman 301 (Guj). Though the Assessing Officer had called for the explanation of the assessee and the assessee had filed letters dated 27.08.2007 and 20.12.2007, there is no discussion in the relevant assessment order regarding the concerned issue and the applicability of the decision relied upon by the assessee to the facts of the assessee's case with reference to the provisions of Section 28(iv) of the I.T. Act, 1962. The records do not indicate that the Assessing Officer had examined the issue with reference to all the available judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue involved in the case of Kesaria Tea Co. Ltd., are different from that of the assessee's case. 10. In view of the above, I am of the opinion that the Assessing Officer's failure to consider the ratio of the decision of the Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar and Sons Ltd. Reported in 222 ITR 344 (SC) with reference to the facts of the assessee's case, makes the relevant assessment order erroneous and prejudicial to the interest of the revenue. The ratio of the decisions of the Hon'ble Supreme court in the case of Malabar Industrial Company Ltd. Vs. CIT reported in 243 ITR 83 and CIT vs. Max India Ltd. Reported in 295 ITR 282 (SC), are, therefore, not applicable to the facts of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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