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2017 (8) TMI 618 - HC - Income TaxDisallowance of depreciation - no business activity and the plant and machinery are not in use - Held that:- The orders of the authorities were perused, including the Tribunal's order in the assessee's own case for the previous Assessment Years 2004-05 and 2005-06 wherein the Tribunal has allowed the claim of depreciation holding that the assets said to have been put to use as the claim of depreciation allowed in the earlier years and the facts are no different in the order under consideration. Thus, when the Tribunal allowed the claim of depreciation holding that the assets said to have been put to use were identical, the depreciation on assets was directed to be allowed. Goodwill as held to be an asset eligible for depreciation. See Commissioner of IncomeTax Vs. Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] Addition on surplus on one time settlement with Banks - application of Sections 28(iv) and 41(1) - Held that:- As overlooking the aspect of payment of interest which has not been waived and in regard to which no relief was claimed. The loan agreement, in its entirety, was not obliterated in the present case as well. Therefore, we are of the opinion that in the present case Section 28(iv) was not attracted.overlooking the aspect of payment of interest which has not been waived and in regard to which no relief was claimed. The loan agreement, in its entirety, was not obliterated in the present case as well. Therefore, we are of the opinion that in the present case Section 28(iv) was not attracted. As far as Section 41(1) is concerned, the act of remission was attributable to the creditor and it could not be unilaterally attributed to the debtor himself declaring that he would not pay. There was no material which suggested any act or omission on the part of the creditor which resulted in extinguishment of the liability of the assessee on its account. Writing off such liability in the books of account by the debtor only conveyed the intention of the assessee not to pay. The Revenue relied on the circumstances stated by the Income Tax Officer that claims had not been filed before the Board by Creditors. However, as rightly observed by the Division Bench of the Rajasthan High Court that, there is no provision in the Sick Industrial Companies (Special Provisions) Act, 1985 permitting lodging or raising of claims by the creditor before the BIFR. Before us as well, the BIFR issued notices to those whose debts are secured and equally those whose stakes are involved. As far as the company is concerned, the BIFR could have recommended winding up but it took on record a scheme of rehabilitation and revival of the company. In that process, the arrangements as carved out have been made. Therefore, as held by the Tribunal, in the present case the ingredients of subsection (1) of Section 41 are not attracted. The liability remains and because under the scheme of the BIFR the principal sum was waived, the assessee has not enjoyed any actual benefit of remission of liability in the nature of trading. It is in these circumstances that the claim of deduction in respect of the waiver of loan amounting to ₹ 8,36,99,463/ was granted. The Assessing Officer was directed to allow it. Addition being increase in the value of land hived off - matter restored to the file of the First Appellate Authority - Held that:- To our mind, reliance placed by Mr. Pinto on “Solid Containers” [2008 (8) TMI 156 - BOMBAY HIGH COURT] is misplaced. The Tribunal has neither misdirected itself in law nor its order can be termed as perverse when it took assistance of the Division Bench Judgment of Rajasthan High Court in the case of Commissioner of Income Tax Vs. Shree Pipes Limited (2006 (4) TMI 70 - RAJASTHAN HIGH COURT) as also the Division Bench Judgment of this Court in Mahindra and Mahindra [2003 (1) TMI 71 - BOMBAY High Court]. In the facts and circumstances, the view taken by the Tribunal is imminently possible. Revenue appeal dismissed.
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