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TMI Blog2008 (8) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the court was delivered by SWATANTER KUMAR C.J. This appeal is directed against the order passed by the Income Tax Appellate Tribunal, Mumbai Bench dated 31st December, 2001, wherein the Tribunal has rejected the contention raised by the Assessee that the loan was a capital receipt and has not been claimed as deduction from the taxable income as expenses and, therefore, did not represent income under section 41(1) and, thus, sustained the addition of Rs.6,86,071. The Assessing Officer had made the addition on the ground that the credit balance returned back is the income of the Assessee in view of the fact that it is again directly arising out of the business activity and the same was liable to be taxed under section 28 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Commissioner (Appeals), further appeal was preferred before the Income Tax Appellate Tribunal which again allowed the appeal on other counts but on the above issue and while relying upon the judgment of the Supreme Court in the case of Commissioner of Income Tax, Madurai v. T.V. Sundaram Iyengar and Sons Ltd., [1996] 222 ITR 344, sustained the view taken by the Commissioner. The Tribunal held as under: "8. We have carefully considered the submissions made by the rival parties. The assessee company had taken certain loan from M/s. P.S. Jain Motors. This amount was payable to them with interest of Rs.2,83,819. The party filed a suit for recovery and thereafter the assessee company filed counterclaims and the matter was settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt and also keeping in view the provisions of Section 28(iv) of the Act, we find full justification for making the addition of Rs.6,86,071. Accordingly, the findings of the learned Commissioner of Income-tax (Appeals) are upheld." 3. It is worthwhile to refer to observation of Apex Court in CIT v. T.V. Sundaram Iyengar and Sons Ltd. [1996] 222 ITR 344. 22. The principle laid down by Atkinson, J. applies in full force to the facts of this case. If a common sense view of the matter is taken, the assessee, because of the trading operation, had become richer by the amount which it transferred to its profit and loss account. The moneys had arisen out of ordinary trading transactions. Although the amounts received originally were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the money as its own money and taken the amount to its profit and loss account. There is no explanation from the assessee why the surplus money was taken to its profit and loss account even if it was somebody else's money. In fact, as Atkinson, J. pointed out that what the assessee did was the common sense way of dealing with the amounts." 4. The present appellant can hardly drive any advantage from the case of Mahindra Mahindra Ltd. v. CIT [2003] 261 ITR 501 (Bom). As in that case, a clear finding was recorded that the Assessee continued to pay interest at the rate of 6% for a period of 10 years and the agreement for purchase of toolings was entered into much prior to the approval of loan arrangement given by the reserve Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X
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