THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 vs. LUXOR WRITING INSTRUMENTS PVT. LTD.

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ITA - 167 / 2024HC Delhi11 March 20242 pages
For Petitioner: RUCHIR BHATIA
AI SummaryRemanded

What did the High Court hold?

The High Court admitted the appeal, finding prima facie merit in the submission that the ITAT failed to consider the purpose of the loan. The court referenced a previous ruling on loan waivers and their taxability based on the loan's purpose.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) made observations regarding the waiver of a loan. The High Court noted that the ITAT might not have adequately considered the purpose for which the loan was originally taken.

What were the issues?

Whether the ITAT was justified in relying on a specific Supreme Court decision when the facts of the assessee's case were distinguishable, and whether the purpose of the loan waiver was adequately considered.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned in the provided text, but the context relates to income from waiver of loans.

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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$~77 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 167/2024

THE PR. COMMISSIONER OF INCOME

TAX -CENTRAL -1

..... Appellant Through: Mr. Ruchir Bhatia, Sr. Standing Counsel.

versus

LUXOR WRITING INSTRUMENTS PVT. LTD. ..... Respondent

Through: Mr. Paritosh Jain, Adv.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR

KAURAV

O R D E R %

11.03.2024

CM APPL. 14516/2024 (42 Days Delay in Re-filing)

Bearing in the mind the disclosures made, the delay of 42 days in re-filing the appeal is condoned. The application shall stand disposed of.

ITA 167/2024 1. Having heard Mr. Bhatia, learned counsel appearing in support of the appeal as well as Mr. Jain, learned counsel for the respondent, we take note of the following observations that were rendered by this Court in Logitronics P. Ltd. vs. Commissioner of Income Tax [2011 SCC OnLine Del 896]:- “23. In the context of waiver of loan amount, what follows from the reading of the aforesaid judgment is that the answer would depend upon the purpose for which the said loan was taken. If the loan was taken for acquiring the capital asset, waiver thereof would not This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 13:13:23

amount to any income eligible to tax. On the other hand, if this loan was for trading purpose and was treated as such from the very beginning in the books of account, as per T.V. Sundaram Iyengar and Sons Ltd. (1996) 222 ITR 344 (SC), the waiver thereof may result in the income more so when it was transferred to the profit and loss account.”

2.

It is in the aforesaid context that we prima facie find merit in the submission of Mr. Bhatia that the Income Tax Appellate Tribunal [„ITAT‟] has failed to accord due consideration to the aspect of the purpose for which the loan had been received. 3. Consequently, we admit the instant appeal on the following question of law:- A. Whether on facts and circumstances of the case, the ITAT was justified in relying upon the decision of the Supreme Court in Commissioner v. Mahindra & Mahindra Limited [(2018) 16 SCC 79] when the facts which obtained in the case of the assessee were clearly distinguishable?

4.

Let the appeal be called again on 20.05.2024.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. MARCH 11, 2024/ RW This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 13:13:23

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