The Tax Publishers2020 TaxPub(DT) 2615 (Bom-HC) : (2020) 426 ITR 0266 : (2020) 316 CTR 0842 : (2020) 272 TAXMAN 0441

INCOME TAX ACT, 1961

Section 41(1)

Surplus arising on prepayment of deferred sales-tax loan at NPV was a capital receipt which could not be termed as remission or cessation of a trading liability so as to invite section 41(1).

Business income under section 41(1) - Remission or cessation of trading liability - Prepayment of deferred sales-tax loan at NPV -

Question arose for consideration was whether surplus arising on prepayment of deferred sales tax loan at net present value (NPV) as per industrial assistance scheme of Government of Karnataka could be termed as remission on cessation of a grading liability under section 41(1).Held: Surplus arising on prepayment of deferred sales-tax loan at NPV was a capital receipt which could not be termed as remission or cessation of a trading liability so as to invite section 41(1).

Followed:CIT-6, Mum. v. Balkrishna Industries Ltd., (2018) 15 SCC 608 (SC) : 2017 TaxPub(DT) 5467 (SC), CIT-8 v. Sulzer India Limited, Hardoli Paper Mills Limited, Associated Capsules (P) Ltd., KSB. Pumps Ltd., SI. Group India Ltd., M/s. Godrej Consumer Products Limited, Grindwell Norton Ltd., Grindwell Norton Ltd. (2015) 369 ITR 717 (Bom-HC) : 2015 TaxPub(DT) 65 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2004-05

INCOME TAX ACT, 1961

Section 234B Section 234C

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT