Gentek Agro P.Ltd, Mumbai vs Department Of Income Tax
- CitationITA No.5488/M/2013
Ratio decidendi
The rule this decision rests on
The Tribunal's dismissal of the Revenue's appeal rests on the reasoning that the assessee had not claimed the interest on the loan as a revenue deduction in any earlier year, having capitalised it in the fixed asset schedule rather than routing it through the profit and loss account, so that the provisions of section 41 of the Income Tax Act, 1961 are not attracted to the waiver of the loan under a one-time settlement; and that where the CIT(A) has reasoned the matter on the basis of the facts and relevant case law, no infirmity in that reasoning is found and it is upheld.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Income Tax Officer - 9(1)(4), M/s. Gentek Agro Pvt. Ltd., Room No.224, 105, Heera Panna Industrial Aayakar Bhavan, Vs. Estate, M.K. Marg, Goregaon (E), Mumbai - 400 020 Mumbai - 400 063 PAN: AABCG 7275M (Appellant) (Respondent)
Present for: Assessee by : Shri Rajesh N. Vora, A.R. Revenue by : Shri Vijay Kumar Bora, D.R.
Date of Hearing : 07.05.2015 Date of Pronouncement : .2015
ORDER
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the revenue against the order dated 03.06.2013 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2006-07.
2. The Revenue has taken following Grounds of appeal:
"1. Wheter, on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition of Rs.18,48,187/- made by the Assessing Officer by invoking section 41(1) of the I.T. Act 1961, without appreciating the fact that the provisions of section 41(1) would be attracted if a liability is written off in the book of account?
2. The appellant craves leave to amend or alter any of the grounds add a new ground which may be necessary."
3. The Revenue in this appeal is aggrieved by action of Ld. CIT(A) in deleting the addition made by the Assessing officer u/s 41 of the Act treating 2 ITA No.5488/M/2013 M/s. Gentek Agro Pvt. Ltd.
the loan amount waived by the bank in one time settlement as cessation of liability. The Ld. CIT(A) in the impugned order has observed that the loan was obtained by the assessee for the purchase of capital asset. The assessee has even never claimed the interest on the loan amount as revenue expenditure. The said amount of interest was capitalized in the fixed asset schedule and not routed through P&L account and was not claimed as deduction in any earlier assessment year, so the provisions of section 41 of the act were not attracted in this case. The ld. CIT(A) while deleting the impugned addition has relied upon various case laws in his detailed and well reasoned order. We do not find any infirmity in the impugned order of the Ld. CIT(A) and the same is accordingly upheld.
4. The appeal of the Revenue is therefore dismissed.
Order pronounced in the open court on 30.06.2015.
Sd/- Sd/- (R.C. Sharma) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 30.06.2015. * Kishore, Sr. P.S.
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.
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