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2020 (6) TMI 587 - HC - Income TaxSurplus arising on prepayment of deferred sales tax loan at net present value (NPV) - Whether a capital receipt which cannot be termed as remission on cessation of a trading liability under section 41(1)? - Tribunal held that decision of the Bombay High Court in Sulzer India Limited [2014 (12) TMI 267 - BOMBAY HIGH COURT] squarely covered the issue and that the first appellate authority made no mistake in holding that the surplus arising on prepayment of deferred sales tax loan at NPV was a capital receipt which could not be termed as remission or cessation of a trading liability so as to invite section 41(1) - HELD THAT:- Value (NPV) should be treated as a capital or a revenue/trading receipt and applicability of section 41(1) of the Act thereto came up for consideration before the Supreme Court in Balkrishna Industries Limited [2017 (11) TMI 1626 - SUPREME COURT] in which the decision of this Court in Sulzer India Limited [2014 (12) TMI 267 - BOMBAY HIGH COURT] was also considered. Supreme Court noted that the main judgment out of which the appeals arose and were considered in the said case was rendered in Sulzer India Limited (supra). Supreme Court referred to the decision of this Court in Sulzer India Limited (supra), more particularly to paragraph 40 thereof which has been extracted above, and held that the aforesaid approach of the High Court was without any blemish. Accordingly, the appeals were dismissed. No error or infirmity in the view taken by the Tribunal. This issue is squarely covered by the decisions in Sulzer India Limited (supra) and Balkrishna Industries Ltd. (supra) and Tribunal rightly followed the same. Consequently, we see no reason to interfere with the same. Question No.1 so framed is accordingly answered against the Revenue and in favour of the assessee. Interest under section 234B and section 234C - Whether interest not chargeable with respect to tax liability determined under minimum alternate tax (MAT)? - HELD THAT:- Though in Rolta India Limited [2011 (1) TMI 5 - SUPREME COURT] Supreme Court held that interest under sections 234B and 234C is payable on failure to pay advance tax in respect of tax liability under section 115JB of the Act, the fact remains that at the time of payment of advance tax by the assessee the decision of the Karnataka High Court in Kwality Biscuits Limited [2006 (4) TMI 121 - SC ORDER]was holding the field as per which assessee was not required to pay advance tax since the entire exercise of computing book profit could only be made at the end of the financial year and therefore, following the law applicable at that point of time, assessee did not pay the advance tax on the book profit which was subsequently computed. Therefore, there was no deliberate or intentional failure to pay advance tax on the book profit by the assessee. In the circumstances, Tribunal was justified in affirming the view taken by the first appellate authority that the charge of interest under sections 234B and 234C on the book profit was not justified. - Decided against revenue.
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