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2013 (9) TMI 634 - AT - Income TaxNature of receipt of Rs. 108 crores from Gillette USA for repayment of its debts pursuant to sales of its entire shareholding in the assessee-company to Newell - Capital receipt or revenue receipt - Gillette was neither its shareholder nor it increased the shareholding of Gillette USA or its subsidiaries in the assessee company. - Held that:- it is not correct that the assessee company obtained any subsidy or grants in aid or compensation as a result of remittance of a sum to the banks. The Delhi Bench of the Tribunal in the case of Deputy CIT v. Lurgi India Co. Ltd. [2007 (8) TMI 379 - ITAT DELHI-A] relied upon by the learned authorised representative has held that the receipt of Rs. 13 crores by an assessee as a non-refundable grant from its parent company was a capital receipt, despite the fact that the payment was made to compensate the assessee for trading loss since it did not stem from any business consideration. - Decided against the revenue. Taxability of amount credited in the account of Assessee in the absence of reasonable explanation to the said credit in the account – Held that:- Commissioner (Appeals) has sustained this addition out of the addition of Rs.118.09 crores on the basis that M/s. Gillette Co., USA, had paid the said amount to the credit of the assessee's account - Since the assessee had already credited a sum of Rs. 1.99 crores to its profit and loss account, and offered it to tax, the learned Commissioner of Income-tax (Appeals) restricted the addition to Rs. 9.58 crores, since the amount was credited to the bank account of the assessee. Hence, in the absence of any contrary and satisfactory explanation by the assessee, the learned Commissioner of Income-tax (Appeals) has rightly treated this amount as income of the assessee – Decided against the Assessee. Waiver of loan to be treated as revenue receipt taxable under the Income Tax Act or capital receipt not taxable - Waiver of loan of Rs. 3.34 crores by M/s. Gillette Co., USA – Held that:- Reliance has been placed upon the Hon’ble Delhi High Court in the case of Logitronics P. Ltd. v. CIT [2011 (2) TMI 12 - DELHI HIGH COURT], wherein it has been held that if a loan was taken for acquiring a capital asset, waiver thereof would not amount to any income exigible to tax. On the other hand, if the loan was for trading purpose and was treated as such from the very beginning in the books of account the waiver thereof may result in income more so when it was transferred to the profit and loss accounts - Unless it is examined in the present case as to what was the purpose of taking the loan amount which was waived, the taxability of the waived amount as income cannot be adjudicated upon - Since this material aspect of the facts has remained to be examined by the authorities below before holding the waived amount as income exigible to tax - Remanded the matter to the file of the Assessing Officer with direction to adjudicate upon the issue afresh in view of the decision of the Hon'ble Delhi High Court in the case of Logitronics P. Ltd. v. CIT [2011 (2) TMI 12 - DELHI HIGH COURT].
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