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2018 (1) TMI 542 - HC - Income TaxAccrual of income - interest accrued to the assessee in respect of the loan given to Method - Whether the finding of the Tribunal that the claim of the assessee that no income accrued to it in respect of the loan given to ‘Method’ could not be allowed on the basis of resolution of its Board of Directors on the ground of the subsequent fact of passing of decree by the Hon’ble High Court against the Bank and the appeal filed therefrom is vitiated by reason of inter alia of consideration of irrelevant materials and/or is otherwise perverse ? Held that:- We find from the impugned order, the Tribunal restored the matter of interest to the Assessing Officer on the ground that C.I.T.(A) had not taken note of the subsidiary having had filed the suit and obtained a decree, which though stayed was so on condition of furnishing bank guarantee. However, in doing so, the Tribunal had not referred to the reasoning of the Assessing Officer. Since the suit having been filed and decree obtained being the basis of the Tribunal’s reasoning is no longer in existence, the decree having been set aside, we find that the assessee had by Board resolution adopted, prior to the previous year to the assessment year in the reference, decided to waive interest on the loan. That position having been restored it cannot be said there was accrual of interest income in the assessment year. We therefore answer the questions in this reference as follows: a) Question no.1 in favour of the assessee in view of the decree having been set aside as brought to our notice though the same was not disclosed to the Tribunal. b) Question no.2 is accordingly answered in the negative and in favour of the assessee.
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