The Commissioner of Income Tax ¿¿¿ II vs. Jindal Equipments Leasing & Consultancy Services Ltd.

ITA-51/2009HC Delhi2009:DHC:566923 December 20097 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal deleted the addition, holding that Section 41(1) was not applicable as the loan was neither claimed nor allowed as a deduction. The High Court agreed that Section 41(1) was not applicable and also found that Section 28(iv) was not attracted as the written-off amount was a capital receipt and not a benefit or perquisite arising from business.

What were the facts?

The assessee, an investment company, had a loan payable to JSPL. JSPL wrote off a portion of this loan in its books. The AO added this amount to the assessee's income under Section 41(1), which was confirmed by the CIT(A).

What were the issues?

Whether the amount of loan written off by a creditor constitutes income of the debtor under Section 41(1) or Section 28(iv) of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 41(1),Section 28(i),Section 28(iv)

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IN THE HIGH COURT OF DELHI AT NEW DELHI ITA No. 51 of 2009 & CM No.15419 Reserved on: 06th November, 2009 %

Pronounced on : 23rd December, 2009

The Commissioner of Income Tax – II

. . . Appellant

through : Mr. Sanjeev Sabharwal, Advocate.

VERSUS

Jindal Equipments Leasing & Consultancy Services Ltd. . . .Respondent

through: Mr. Ajay Vohra with Ms. Kavita Jha and Mr. Sriram Krishna, Advocates.

CORAM :-

THE HON’BLE MR. JUSTICE A.K. SIKRI

THE HON’BLE MR. JUSTICE SIDDHARTH MRIDUL

1.

Whether Reporters of Local newspapers may be allowed to see the Judgment?

2.

To be referred to the Reporter or not?

3.

Whether the Judgment should be reported in the Digest?

A.K. SIKRI, J.

1.

The respondent (hereafter referred to as „the assessee‟) is an investment company registered with RBI and NBFC. During the previous year relevant to the assessment year 2003-04, the assessee reflected a loan of Rs.6,80,31,189/- payable to M/s. Jindal Steel & Power Ltd. (JSPL). Out of the above, JSPL had written off a sum of Rs.1,46,53,065/- in its books of accounts. In the light of this, when the credit

The order continues below.

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