Solid Containers Ltd. v. DCIT

Kumar Wire Cloth Manufacturing Co. Ltd, Raigad vs. ITO 5(2)(2), Mumbai

In the result, appeal of the assessee is allowed

Bench: Shri G.S. Pannu & Shri Pawan Singhm/S Kumar Wire Cloth Ito Ward - 5(2)(2) Manufacturing Co. Ltd. Mumbai. D-23, Midc, Taloja, Tal-Panvel, Vs. District-Raigad, 410218. Pan: Aaack1716E Appellant Respondent Appellant By : Shri V.Chandrasekhar (Ar) Respondent By : Ms. Pooja Swaroop (Ar)

…e Cloth Manufacturing Co. Ltd. caused as to why disallowance of such amount be not made. The assessee filed its reply dated 13/12/2010 and relied on the various decisions viz; Mahindra & Mahindra Ltd Vs CIT 261 ITR 501(Bom), Solid Container Vs DCIT (2009)(308 ITR 417 (Bom), CIT Vs Tosha International Ltd (2009) 176 Taxman 187 (Delhi). The contention of the assessee was not accepted by the assessing officer holding that disclosed the purpose for which the loan was utilized and treated the same as income of the assessee as per the provisions of section 41(1) rws 28(iv) of the Act. The ld CIT(A) confirmed the…

ITO 3(3)(3), Mumbai vs. Skylark Travels P. Ltd, Mumbai

The appeal of the Revenue is dismissed

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2012-13 Income Tax Officer-3(3)(3), M/S Skylark Travels Pvt. Room No.672, Ltd. बनाम/ Aayakar Bhavan, 114, Shahid Bhagat Singh Vs. M. K. Marg, Marg, Po Box No.19940, Mumbai-400020 Colaba, Mumbai-400005 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaacs9546A

…ting the additions under section 41(1) of the Income Tax Act, 1961 (hereinafter the Act), amounting to Rs.59,23,786/- on account of unproved sundry creditors relying upon the decision from Hon'ble Bombay High Court in the case of Solid Containers Pvt. Ltd. 308 ITR 417 (Bom.). 2. During hearing of this appeal, at the outset, Shri B.V. Jhaveri, ld. counsel for the assessee, pointed out that the tax effect in the present appeal, filed by the Revenue, is below prescribed monetary limit of Rs.20 lakh. The ld. DR, Shri A. Mohan, did not controvert the factual matrix, though he defended the addition made by the…

Khandwala Securities Ltd, Mumbai vs. ITO 4(3)(2), Mumbai

Bench: Shri R. C. Sharma, Am & Shri Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 3100/Mum/2011 (निर्धारणवर्ा / Assessment Year: 2006-07)

…principle as laid down by the honourable Supreme Court in the case of TV SundaramIyengar and Sons Ltd (1996) 222 ITR 344 (SC). Hence, the said decision is also applicable in the case of the appellant. 3.3.2. In the case of Solid Containers Ltd v DCIT (2009) 308 ITR 417 (BOM) it was held that the waiver of loan taken for business purpose, the amount retained in the business and as such the amount that initially didn't have the character of income becomes liable lo tax. The head notes of that decision reads as follows: Section 28(iv) of the Income-tax Act, 1961- Business income Value of any benefit orperquisite…

ITO 1(2)(3), Mumbai vs. Meher Synthetics P.Ltd, Mumbai

Bench: Hon’Ble Sh. G. S. Pannu, Am & Hon’Ble Sh. Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 4431/Mum/2016 (निर्धारणवर्ा / Assessment Year: 2007-08)

…ding transaction and therefore the said decision on which learned assessing officer heavily relied upon is not applicable. 1.9.2 The learned assessing officer has also relied on judgment of the Bombay High Court in the case of Solid Containers Ltd. Vs. DCIT (308 ITR 417) to support his argument that even the waiver of loan would amount to taxable under section 28(iv). in this context we have to submit that while delivering its judgment in the case of Solid Containers Ltd. the court has also considered the earlier decision of the Bombay 13 I.T.A. No. 4431/Mum/2016 Meher Synthetics Pvt. Ltd High Court in the case…

Toucan Food & Snacks P.Ltd, Mumbai vs. Asst CIT RG 8(3)(3), Mumbai

In the result, appeal filed by the assessee is treated as allowed for statistical purposes

Bench: Shri B.R. Baskaran (Am)& Shri Pawan Singh (Jm)

…d benefit from its business activities in terms of sec. 28(iv) of the Act by non-paying debenture amount. In this regard, the Assessing Officer took support from the decision rendered by Hon'ble Bombay High Court in the case of Solid Containers Ltd. Vs. DCIT (308 ITR 417) and also decision rendered by Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar & Sons Ltd. (222 ITR 344). Accordingly, the Assessing Officer assessed ` 698.40 lakhs as income of the assessee u/s. 28(iv) of the Act. The learned CIT(A) also confirmed the same and hence the assessee has filed this appeal. 4. The Learned AR submitted that…

ITO 2(1)(1), Mumbai vs. Tata Motors Ltd, Mumbai

In the result, appeal of the revenue is dismissed

Bench: Shri R.C.Sharma, Am & Shri Amarjit Singh, Jm Co No.193/Mum/2012 (Assessment Year :2002-03) Ito 2(1)(1) Vs. M/S. Tata Motors Ltd., R.No.552, Aayakar Bhavan Bombay House, Mumbai 24, Homi Modi Street Fort, Mumbai Pan/Gir No. Aaact2727Q Appellant) .. Respondent)

…e under section 28(iv) of the Act. The Id. DR relied on the following decisions in support of his contention: i) CIT v Chipsoft Technology (P.) Ltd. (80 DTR 250)(Del.)(Alternate citation 26 taxmann.com 109)(not handed over by the DR) ii) Solid Containers Ltd (308 ITR 417)(Bom.) iii) Ramaniyam Homes (Tax Case (Appeal) No.278 of 2014) reported in 384 ITR 530 6 CO 193/Mum/2012 M/s. Tata Motors Ltd., 14. The Id. DR also relied on the Supreme Court decisions in case of CIT v T. V. Sundaram lyengar and Sons Ltd. (222 ITR 344) and CIT v M/s Karamchand Thapar (222 ITR 112) cited by the AO. 15. On the other hand, content…

ITO 1(3)(2), Mumbai vs. Saurabh Industries Ltd, Mumbai

In the result the appeal is dismissed

Bench: Shri Joginder Singh () & Shri N.K. Pradhan () Assessment Year: 2006-07

…and in the circumstances of the case and in Law and without prejudice to ground of appeal No. 1, the CIT(A) ought to have confirmed the addition u/s 41(1) r.w.s. 28(iv) in view of the decision of Hon’ble Bombay High Court in the case of Solid Containers Ltd. (308 ITR 417) and M/s. T.V. Sundaram Ayyangar & Sons (222 ITR 344 (1996). 3. In item no. 7 of the Schedule ‘O’ to Profit & Loss Account and Balance Sheet filed along with the return of income, it has been mentioned that “the company has settled with one of the party and the amount not payable has been directly credited to the Capital Reserve Account as cessa…

Mackinnon Mackenzie & Co.Ltd, Mumbai vs. ITO 2(2)(3), Mumbai

In the result, the appeal of the assessee is allowed

Bench: Shri D.T.Garasia, Jm & Shri Rajesh Kumar, Am

…rn of income submitting annual accounts before all the authorities including Company Law Board. While making the addition the authorities below have relied upon the two decisions which were clearly distinguishable as under : i) Solid Containers Ltd V/s DCIT (308 ITR 417) (Bom), wherein the Hon‟ble Bombay High Court has held that loan taken for trading activities ultimately, upon waiver the amount was retained in business by the Assessee. The income has become assessee‟s income and was assessable to tax whereas in the present case the amount continued to be reflected in the liability and therefore squarely distin…

Mipco Seamless Rings( Guj) Ltd, Mumbai vs. Asst CIT 6(3), Mumbai

In the result, both the appeals of the assessee are treated as allowed for statistical purposes

Bench: Shri B.R. Baskaran (Am)& Shri Ravish Sood (Jm)

…since the same represents the shortage amount between the loan liability and sale proceeds of asset. He further submitted the Ld CIT(A) was not justified in following the decision rendered by the Hon’ble Bombay High Court in the case of Solid Containers Ltd (308 ITR 417)(Bom), since the said decision was rendered in the context of working capital loan. The Ld A.R submitted that the assessee had obtained loan for acquiring capital assets and hence the above said decision of Hon’ble Bombay High Court will not apply to the instant case. He further relied upon various case laws to contend that the principal portion…

DCIT 10(1), Mumbai vs. Synchem Chemicals (I) P. Ltd, Mumbai

In the result, the appeal filed by the revenue is dismissed

…170 of I.T. Act, hence condition no. (ii) was not fulfilled. A.O’s addition is not tenable in law. 14. The AO while making the addition relied upon the case of CIT vs. T.V. Sundram Iyngar & Sons reported vide 222 ITR 344(SC) and Solid Containers Ltd. vs. DCIT 308 ITR 417 on the issue of treating the loan as trading liability. The fact of the T.V. Sundram Iyngar case are entirely different from the fact of the case in our hand the case in our hand in respect of re- payment of loan which was assigned on account of scheme of amalgamation which was approved by Hon’ble Bombay High Court and in the case of T.V.Sundram,…

DCIT 8(1), Mumbai vs. Garware Polyester Ltd, Mumbai

In the result, appeal filed by the assessee company in ITA No

Bench: Shri & Shri Amit Shukla & Manoj Kumar Aggarwalआमकय अऩीर सं./I.T.A. No. 6169/Mum/2011 (नििाारण वषा / Assessment Year: 2007-08) आमकय अऩीर सं./I.T.A. No. 6541/Mum/2011 (नििाारण वषा / Assessment Year: 2007-08) बिाम/ M/S Garware Polyester Dy. Cit- 8(1), Limited, 50 A, Swami Mumbai. V. Nityanand Marg, Western Express Highway, Vile Parle (East), Mumbai – 57. स्थामी रेखा सं./ Pan : Aaacgo571D (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) Assessee By Shri Saurabh Deshpande Revenue By : Shri Anuj Kisandwala सुनवाई की तायीख /Date Of Hearing : 12-01-2017 घोषणा की तायीख /Date Of Pronouncement : 18-01-2017 आदेश / O R D E R Per, Amit Shukla: The Aforesaid Cross Appeals Have Been Filed By The Assessee As Well As By The Revenue Against The Impugned Order Dated 28Th July, 2011, Passed By The Ld. Cit(Appeals) – 15, Mumbai For The Quantum Assessment Passed U/S 144(C)(4) R.W.S. 143(3) Of The Income Tax Act, 1961, For The Assessment Year 2007-08. Ita 6169/M/11 & Ita 6541/M/11 2

…reliance was placed on the decision of Hon’ble Bombay High Court in the case of Mahindra & Mahindra v. CIT reported in 261 ITR 501. When the A.O. confronted with another decision of Hon’ble Bombay High Court in the case of Solid Containers Limited reported in 308 ITR 417, the assessee submitted that the same is not applicable on the facts of the present case, because in that case the assessee has taken a loan as a trading receipt and the same was credited to the P&L account and that is why it was held as assessable as business income. The Hon’ble Bombay High Court observed that since the money forfeited by the as…

Garware Polyester Ltd., Mumbai vs. Dy.CIT-8(1), Mumbai

In the result, appeal filed by the assessee company in ITA No

Bench: Shri & Shri Amit Shukla & Manoj Kumar Aggarwalआमकय अऩीर सं./I.T.A. No. 6169/Mum/2011 (नििाारण वषा / Assessment Year: 2007-08) आमकय अऩीर सं./I.T.A. No. 6541/Mum/2011 (नििाारण वषा / Assessment Year: 2007-08) बिाम/ M/S Garware Polyester Dy. Cit- 8(1), Limited, 50 A, Swami Mumbai. V. Nityanand Marg, Western Express Highway, Vile Parle (East), Mumbai – 57. स्थामी रेखा सं./ Pan : Aaacgo571D (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) Assessee By Shri Saurabh Deshpande Revenue By : Shri Anuj Kisandwala सुनवाई की तायीख /Date Of Hearing : 12-01-2017 घोषणा की तायीख /Date Of Pronouncement : 18-01-2017 आदेश / O R D E R Per, Amit Shukla: The Aforesaid Cross Appeals Have Been Filed By The Assessee As Well As By The Revenue Against The Impugned Order Dated 28Th July, 2011, Passed By The Ld. Cit(Appeals) – 15, Mumbai For The Quantum Assessment Passed U/S 144(C)(4) R.W.S. 143(3) Of The Income Tax Act, 1961, For The Assessment Year 2007-08. Ita 6169/M/11 & Ita 6541/M/11 2

…reliance was placed on the decision of Hon’ble Bombay High Court in the case of Mahindra & Mahindra v. CIT reported in 261 ITR 501. When the A.O. confronted with another decision of Hon’ble Bombay High Court in the case of Solid Containers Limited reported in 308 ITR 417, the assessee submitted that the same is not applicable on the facts of the present case, because in that case the assessee has taken a loan as a trading receipt and the same was credited to the P&L account and that is why it was held as assessable as business income. The Hon’ble Bombay High Court observed that since the money forfeited by the as…

Asst CIT Cir 11(5) vs. Jsw Steel Ltd

In the result assessee’s appeal is partly allowed whereas revenue’s appeal is dismissed

Bench: Shri Amit Shukla & Shri Ashwani Tanejaassessment Year: 2004-05

…hindra vs. CIT, reported in 261 ITR 501. Similarly, in a later judgment Hon’ble Court in the case of CIT vs. Softworks Computers Pvt. Ltd., reported in 354 ITR 16, after considering the said judgment and also the judgment of Solid containers Ltd., reported in 308 ITR 417, observed and held as under:- “7. We find that the decision of this court in the matter of Solid Containers Ltd. (supra) has also considered the earlier decision in the matter of Mahindra and Mahindra Ltd. (supra) and distinguished the same by holding that in that case the loan was given for purchase of capital assets unlike in the case of Solid…

Jsw Steel Ltd vs. Asst CIT Cir 11(5)

In the result assessee’s appeal is partly allowed whereas revenue’s appeal is dismissed

Bench: Shri Amit Shukla & Shri Ashwani Tanejaassessment Year: 2004-05

…hindra vs. CIT, reported in 261 ITR 501. Similarly, in a later judgment Hon’ble Court in the case of CIT vs. Softworks Computers Pvt. Ltd., reported in 354 ITR 16, after considering the said judgment and also the judgment of Solid containers Ltd., reported in 308 ITR 417, observed and held as under:- “7. We find that the decision of this court in the matter of Solid Containers Ltd. (supra) has also considered the earlier decision in the matter of Mahindra and Mahindra Ltd. (supra) and distinguished the same by holding that in that case the loan was given for purchase of capital assets unlike in the case of Solid…

Piramal Glass Ltd, Mumbai vs. DCIT 7(3)(2), Mumbai

The appeal of the assessee stands partly allowed

Bench: Shri Amit Shukla, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No. 157/Mum/2016 ("नधा"रण वष" / Assessment Year : 2011-2012) M/S Piramal Glass Ltd. Deputy Commissioner Of (Earlier Known As ‘Gujarat Glass Pvt. Ltd.’) Income Tax 7(3)(2) बनाम/ Room No. 669A, 6Th Floor Piramal Tower Ganpatrao Kadam Marg Aaykar Bahwan Vs. Lower Parel M.K.Road, Churchgate Mumbai 400013 Mumbai 400020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabcg-0093-R (अपीलाथ" /Appellant) (""यथ" / Respondent) :

…ement of foreign currency loan at year end advanced to its subsidiary companies. It treated the same as capital in nature and reduced it from the profit in computation of income. Relying upon the decision of Bombay High Court in Solid Containers Ltd. Vs. DCIT 308 ITR 417, AO and DRP found the gain to be revenue in nature and concluded the same to be taxable in the hands of the assessee. Before us, the primary contention of the AR is that it incurred losses on this account in AY 2010-11 but it did not claim the same as allowable expenditure. It has consistently followed accounting policy regarding treatment of for…

D.C.I.T. Circle 3(3), Mumbai vs. Vibhadeep Investment & Trading Ltd., Mumbai

In the result, Revenue’s appeal as well as the Cross Objection

Bench: Sri Jason P. Boaz, Am & Sri Sandeep Gosain, Jm The Asst. Commissioner Of Vs. M/S. Vibhadeep Investment & Income Tax-3(3), Room Trading Ltd., Mafatlal House, No.609, 6Th Floor, Aayakar H. T. Parekh Marg, Backbay Bhavan, M. K. Road, Reclamation, Mumbai 400 Mumbai 400 020 020 Pan: Aaacv 1946 M Appellant .. Respondent C. O. No.155/Mum/2013 (In Ita No.4466/Mum/2012- Ay: 2008-09)

…show that the loan was acquired for the purpose of acquiring/investment in capital assets. Therefore the benefit of remission of loan amounts to benefits as construed u/s. 28(iv) and is liable to be taxed as held in the case of Solid Container Ltd. Vs. DCIT (308 ITR 417).” Assessee’s C.O.No.155/Mum/2013 “1. The learned Commissioner of Income Tax (Appeals) ought to have directed for deletion of disallowance made of interest of Rs.14,65,654/- incurred during the year.” 2. At first, we take up the Revenue’s Appeal in ITA No.4466/Mum/2012. The brief facts in the case are that the Assessee Company engaged in the…

Trans Impex P.Ltd, Mumbai vs. CIT 2, Mumbai

In the result, both the appeals of assessee are allowed

Bench: Shri Shailendra Kumar Yadav & Shri Rajesh Kumar.

…on in the year under consideration, so, action under provisions of Section 263 of the Act is not justified. 6.3 Reliance was placed by ld. Departmental Representative on the decision of Hon’ble Bombay High Court in Solid Containers Ltd. vs. Deputy CIT (2009) 308 ITR 417 (Bom.) does not apply to case before us because in Solid Containers Ltd. (supra), there was in fact remission of liability which evident from fact that by consent between parties liability came to an end. While in case before us is liability still exist and no cause of action arose in the year under consideration for invoking provisions of Sectio…