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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 10TH DAY OF DECEMBER, 2018
BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH
AND
THE HON'BLE MR. JUSTICE K. NATARAJAN
INCOME TAX APPEAL NOS.373 - 374 OF 2013
BETWEEN:
M/S. MANIPAL SOWBHAGYA NIDHI LIMITED, MANIPAL HOUSE,
MANIPAL, REPRESENTED BY ITS DIRECTOR,
SRI T. SANJAY PAI, AGED ABOUT 40 YEARS, SON OF T. NARAYANA M. PAI.
... APPELLANT
(BY MRS. JINITA CHATTERJEE, ADVOCATE, FOR
SRI S. PARTHASARATHI, ADVOCATE)
AND:
THE DEPUTY COMMISSIONER
OF INCOME-TAX, CIRCLE-1, CANARA TOWERS,
UDUPI.
... RESPONDENT
(BY SRI K.V. ARAVIND, ADVOCATE)
THESE INCOME TAX APPEALS ARE FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL BEARING I.T.A. NOS.691 AND 692/BANG/2012, DATED 5-4-2013, FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 RESPECTIVELY.
THESE INCOME TAX APPEALS COMING ON FOR HEARING THIS DAY, RAVI MALIMATH, J., DELIVERED THE FOLLOWING:
J U D G M E N T
The assessee is a non-banking financial Company carrying on the business of accepting deposits from members and lending the same to other members. For the Assessment Years 2007-08 and 2008-09, it filed returns of income declaring a net loss of Rs.1,06,53,753/- and Nil income respectively. The returns were processed under Section 143(1) of the Income Tax Act, 1961, (for short, the Act’), and they were taken up for scrutiny. Thereafter, total income of the assessee were determined at Rs.3,64,75,992/- and Rs.6,96,18,611/- respectively for both the years and
determining a demand at Nil, after setting-off of brought forward losses and brought forward depreciation, etc. However, the Assessing Officer considering the claim of waiver of principal component of deposit and debentures of Rs.4,71,29,745/- and Rs.6,91,24,426/- respectively as taxable revenue receipt as against the assessee’s claim of principal part of deposit and debentures as capital receipt which are not liable to tax. Aggrieved by the same, an appeal was filed before the Commissioner of Income Tax (Appeals), which was dismissed. The appeal preferred to the Tribunal was also rejected. Hence, these appeals.
By the order dated 6-1-2014, the appeals were admitted to consider the substantial questions of law raised in connected appeals in Income Tax Appeal Nos.794 of 2008, 795 of 2008 and 99 of 2009.
Income Tax Appeal No.99 of 2009 was disposed off by the order of even date on the same ground.
Hence, following the judgment in Income Tax Appeal No.99 of 2009 of this Court, the substantial question of law is answered in favour of the assessee and against the Revenue.
The appeals are, accordingly, disposed off.
SD/-
SD/- JUDGE
JUDGE
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